Ukraine's Central Bank Buys Pounds For The First Time

For the first time, Ukraine's Central Bank bought pounds instead of just dollars.  It has alway updated the exchange rate which was at $5.05 for a while, is now at $4.84.  Seems like their policies are going to change.

Ukraine C.Bank buys pounds for first time

KIEV, July 29 (Reuters) - Ukraine's central bank, resolved to lessen the hryvnia's link to the dollar, made its first bid for British pounds on the interbank market on Tuesday, buying the currency at 9.4376 hryvnias.
Dealers said the purchases enlivened the market and succeeded in boosting the U.S. dollar against the hryvnia, bringing its trading level closer to the official rate.
The bank last week bid twice for euros in its first-ever purchases on the interbank market of a currency other than dollars. Bank officials say the moves are intended to optimise reserves and allow for the development of different segments of the market.
"This policy is certainly better than no policy at all," said one dealer. "They talked about playing with a currency basket and that's what they're doing."
Valery Lytvytsky, a senior adviser to the bank's chairman, last week said the purchases were a move towards a more complex formula for establishing the exchange rate and the creation of a currency basket against the hryvnia.
The dollar climbed on the market to 4.68-4.7 hryvnias to the dollar against a starting price of 4.64-4.65.
"After the bank set such a rate for the pound, the dollar rate rose," said one dealer.
Another said: "When you calculate through cross rates, whatever currency the central bank buys it is still higher than the market rate for the dollar on the previous day, so the market rate eventually climbs upward to those rates.
"Many banks have dollar positions, so they are quite happy to sell at 4.68."
Dealers said they believed that speculative moves against the dollar dating from May-June were receding and that the U.S. currency would probably rise on the interbank market to 4.8 by next month.
For three years the central bank kept the hryvnia in a tight corridor of 5.0-5.06 to the dollar, buying and selling currency as required. It abandoned that policy earlier this year and revalued the hryvnia at 4.85.
It has since adjusted that rate several times, with the latest rate, valid from Wednesday, July 30, standing at 4.8448. (Reporting by Natalya Zinets; Writing by Ron Popeski; Editing by Gerrard Raven)

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