Ukraine CB Says Hryvna Rate Perfect

KIEV — The chairman of Ukraine's Central Bank described the current hryvna exchange rate on Thursday as optimal and said the bank would act to keep the rate within a range of 5.0 to 5.2 to the dollar next year.

"We believe that the current rate of 5.05 hryvnas to the dollar is the optimal, the most effective rate for our social needs and economic development," Volodymyr Stelmakh told a news conference.

The hryvna has been officially fixed at a rate of about 5.05 since late April after the Central Bank revalued the currency by about 3 percent in a single stroke, a step which badly hurt market and public confidence.

The currency was widely seen as undervalued by foreign experts and some government officials due to a robust current account surplus and a steady inflow of funds into debt markets.

Since late April, the Central Bank has been buying dollars repeatedly to keep the hryvna from rising sharply, though it has stayed out of the market in the last two days.

Stelmakh reiterated Central Bank plans for next year to reduce inflation to below 10 percent and implement a more flexible currency policy, but said it would not allow the hryvna to appreciate.

The Central Bank has been resisting any sharp appreciation as it wants to defend exporters.

The Central Bank freed up rules of trading on the foreign exchange market this month, allowing commercial banks to buy and sell currency on the same trading day and make forward deals. Dealers said the new rules would help cut Central Bank interference in the long term.