NBU plans to enter interbank in daily regime from Nov 5

The National Bank of Ukraine (NBU) plans to carry out interventions in the form of currency auctions each working day starting from November 5, 2014, NBU Governor Valeriya Gontareva told reporters on Monday.

"The NBU will do this in small volumes," she said.

She said that the Dutch model of auctions will be used – every day within three-six months.

Gontareva said that in the near term the central bank intends to only sell foreign currency and in the future the bank could buy it.

She said that all banks for which limits are set by the central banks will be allowed to participate in the auctions: 88 credit and financial institutions.

The currency auctions will be held from November 5 on working days from 0900 to 100: the minimum bid is from $100,000 and each bank can buy no more than 10% of the declared volume.

"The NBU will collect bids in the morning every day," Gontareva said.

She said that the decisions on the cancelation of some restrictions could result in the short-term fall in the hryvnia exchange rate due to accumulated postponed demand, but the situation could quickly stabilize and in two weeks the central bank will start holding auctions to sell and purchase foreign currency.

She said that in the past 1.5 months the NBU conducted interventions worth $1.3 billion to support the hryvnia.

"We've stabilized the situation," she said.

"We'll pass the heating season this year without problems. We've managed to agree with the IMF that we can directly use our forex reserves to settle all payments for gas," she said.