Ukraine to Issue Gold Coins to Ease Demand for Foreign Currency
October 24, 2011, 9:10 AM ED
By Daryna Krasnolutska
Oct. 24 (Bloomberg) — Ukraine’s central bank will issue gold “investment” coins as it tries to damp citizens’ demand for foreign currency.
The coins will be “freely” traded on a secondary currency market, Oleksandr Dubykhvist, the head of the foreign-currency reserves department at the central bank, told a conference today in the capital Kiev.
The Natsionalnyi Bank Ukrainy controls the hryvnia’s exchange rate by buying and selling foreign currency on the interbank market. It spent $1.9 billion last month to support the hryvnia as demand for foreign currency exceeded supply. International reserves fell in September to $34.95 billion, the lowest level since December.
The central bank changed regulations on Sept. 23 to force residents to provide lenders copies of their passports if they want to buy or sell foreign currency to fight the shadow economy and ease pressure on the hryvnia.
“The situation is stable” on the foreign-currency market, said Dubykhvist. “Citizens’ foreign-currency purchases have declined twice so far this month.”