Ukraine forex market rocked after bank removes peg
CNBC - Feb 06, 2015
A move by Ukraine's central bank to ditch an unofficial peg for the hryvnia has plunged the foreign exchange market into confusion, with buyers of hard currency putting off purchases and sellers holding out for higher levels.
The hryvnia lost 30 percent against the dollar to trade at 24-25 on Thursday after the bank moved closer to a free float by abandoning the foreign currency auctions that had effectively pegged the exchange rate.
On Friday, traders quoted levels ranging from 19.50 to 26.50 hryvnias to the dollar, saying only a few deals had been concluded, with some banks reluctant to even quote a rate, fearing the wrath of the central bank if it was too weak.
"Those who can postpone (having to sell hard currency) are postponing until the last moment, not believing that it (the slide) will stop anytime soon,'' said one dealer at a major Ukrainian bank.
