Hryvnia rebounds
February 25, 2015
Ukraine's currency, the hryvnia, has rebounded by as much as 30 percent against the dollar following an announcement the central bank would block commercial currency trading and buy dollars in an attempt to stop the slide.
The announcement followed a meeting in Kyiv between Prime Minister Arseny Yatseniuk, President Petro Poroshenko, central bank chief Valeriya Hontareva and Finance Minister Natalie Jaresko. The bank said it had banned almost all commercial currency trading until the end of the week.
But in a sign of growing discord between the prime minister and president, Yatsenyuk criticized the bank's decision to ban all trades between banks on behalf of clients trying to dump the hryvnia.
He said it would have a "very complicated and negative effect on the economy of Ukraine, the balance of the financial system and the currency exchange rate."
After the meeting, Yatseniuk tweeted he had called for an extraordinary meeting of Ukraine's parliament to approve a package of laws aimed at stabilizing the financial system.
The hryvnia has been hard hit by instability in the country as Russian-armed separatists gained ground in war-torn eastern Ukraine despite a ceasefire. Russia, which denies its military is involved in the conflict, has also renewed threats to cut off Ukraine's gas supplies.
The currency plummeted from around 26 to the dollar a week ago to 34 on Tuesday. Following the announcement, it shot up to just under 25 to the dollar, according to figures published by Bloomberg. It had already lost half its value over the past year.
sgb/hg (AFP, Reuters, Bloomberg)