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Ukraine central bank ready to do more after forex intervention

Source: Reuters - Mon, 2 Dec 2013 03:08 PM
Author: Reuters
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KIEV, Dec 2 (Reuters) - Ukraine's central bank vowed on Monday to do what was necessary to uphold financial stability after huge protests against President Viktor Yanukovich at the weekend forced it to intervene on the currency market.

In a statement, National Bank of Ukraine chairman Ihor Sorkin said the bank was ready to increase its presence on "all market segments" to ensure they remained in balance.

He added that the bank had not imposed any restrictions on the money and foreign exchange markets. He urged depositors to "be confident in the banking system" and not to withdraw their savings.

Earlier on Monday, the central bank offered to sell dollars at 8.1502 hryvnia per dollar, it said on its Reuters terminal page. The bank offered dollars at 8.1397 hryvnia in its previous intervention on Nov.14.

The government of Mykola Azarov has resisted pressure from the International Monetary Fund to unhitch the national currency from a tight band around 8 hryvnia to the dollar and allow greater flexibility to reduce imports and help narrow the current account deficit.

But the government's ability to meet a heavy foreign debt repayment schedule in 2014 is undermined by depleted foreign reserve stocks which at the end of October stood at $20.6 billion - which covers less than two and half months of imports.

In his statement, Sorkin expressed confidence that Ukrainian banks could operate well despite the political unrest in the country which followed Yanukovich's U-turn on trade policy away from Europe back towards Russia.

"I urge everyone to be confident in the banking system and maintain deposits. Nobody in Ukrainian society has any interest in the destabilisation of the economic situation," he said.

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