February 5, 2015 / 12:42 PM / 3 years ago

Ukraine central bank cuts official hryvnia rate as bid/ask spread balloons

KIEV, Feb 5 (Reuters) - Ukraine's Central Bank cut the official rate of the hryvnia on Thursday, partly tracking a sharp fall in the indicative value of the local currency after the bank scrapped dollar auctions earlier in the day.

It cut the official rate against the dollar - based on deals on the interbank market - by 6.8 pct to 17.9998 from 16.7289 a day earlier, the most significant fall so far this year.

Earlier on Thursday, the bank also said it would raise its key interest rate to 19.5 percent from 14 percent as of Friday to avert financial collapse, brought ever closer by fighting in the country's east and a lack of foreign funding.

According to Reuters data, the indicative market rate for dollar purchases was in the range of 24.10-24.90 hryvnia per dollar, compared with 16.50 before Thursday's policy moves.

Reporting by Pavel Polityuk; Editing by Richard Balmforth and John Stonestreet

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