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UPDATE 1-Ukraine cbank says no need to change forex policy

Published 03/24/2011, 12:53 PM
Updated 03/24/2011, 12:56 PM

* Says current volatility is insignificant

* Hryvnia weakens slightly

* No progress on prerequisites for the next IMF loan tranche

(Adds quotes, background)

KIEV, March 24 (Reuters) - Ukraine's central bank said on Thursday it saw no need to adjust its exchange rate policy after the hryvnia weakened to a three-month low of 7.97 per dollar.

"The (exchange rate) movements are within 0.5-1 kopeck, which is microscopic volatility," said Valery Lytvytsky, an adviser to central bank Chairman Serhiy Arbuzov, referring to one hundredth of a hryvnia.

"The situation on the foreign exchange market follows the forecasts and does not require any adjustments to our exchange rate policy."

The central bank's net foreign currency purchases on the local market amounted to almost $500 million so far this month, Lytvytsky said.

The bank intervened in the market on Thursday to support the hryvnia, offering to sell dollars at 7.97 hryvnias per dollar . The hryvnia had hovered around 7.95 per dollar since mid-January.

"Our reserves give us full confidence that we will overcome this volatility, which is mostly due to the changes in newsflow both at home and abroad," he said.

Ukraine failed to reach an agreement with a visiting IMF mission last month as the government delayed a planned pension reform and sought to soften a planned increase in energy prices for households.

That prompted the IMF to delay the disbursement of the next $1.6 billion tranche of Ukraine's $15 billion stand-by facility. Ukraine officials then said parliament would vote on the pension reform bill in mid-March but that has not happened. (Reporting by Natalya Zinets; Writing by Olzhas Auyezov; Editing by Richard Balmforth and Susan Fenton)

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