Ukraine’s central bank has imposed currency controls to try to prop up the hryvnia. <br /><br />It has limited private transfers of dollars out of the country to around $5,700 a month.<br /><br />There is also a ban on purchases of foreign currency for overseas investment or for early repayment of loans.<br /><br />“There have been strains on the currency market recently, but we are sure this is only a short-term trend,” the governor of the National Bank of Ukraine, Ihor Sorkin, told a news conference.<br /><br />“The National Bank will strengthen monitoring control on the market to try to reduce speculative demand …. When the situation improves, these temporary measures will be removed.”<br /><br />Analysts warned the moves would promote a flourishing black market in dollars. <br /><br />Ukraine’s debt crisis has left it on the verge of bankruptcy amid anti-government protests against closer ties with Russia.<br /><br />Russia suspended a $15 billion bailout last week after President Viktor Yanukovich, in a concession to protesters, sacked the pro-Russian prime minister.<br /><br />Moscow says it will only restart the funding once it knows who is to be the new prime minister. <br /><br />After the controls were brought in Fitch downgraded Kyiv’s credit rating from B minus to CCC due to political instability and fears over its debt repayment schedule. <br /><br />The hryvnia fell below 9.0 per dollar on Wednesday for the first time in five years. and Fitch said: “There is a risk of a steep and uncontrolled depreciation, given the fragile confidence in the hryvnia.”
