Ukraine’s central bank expects foreign reserves to resume growth

Ukraine’s central bank said foreign- currency and gold reserves will probably resume growth after two months of declines as the former Soviet republic seeks to pay for natural-gas imports in Russian rubles.

The central bank is also taking steps to reduce demand for dollars among the country’s 46 million population, which is estimated at about $10 billion a year, Governor Serhiy Arbuzov said today in a statement on the bank’s website.

“If there’s no disagreement with foreign investors or panic among domestic investors, reserves will rise,” Arbuzov said, without saying when the increase would begin.

The central bank controls the hryvnia’s exchange by buying and selling dollars on the interbank market. Reserves declined to $34.16 billion in October from $34.95 billion the previous month and $38.2 billion in August, according to central bank data. They rose to an all-time high of $38.35 billion in April from $25.29 billion at the start of 2009.

Capital inflows to Ukraine were almost $14 billion in the year through November, Arbuzov said.