Central bank limits forex position

KIEV: Ukraine's central bank has cut limits on local banks' long foreign currency positions to 5 percent of regulatory capital from 20 percent, according to a document obtained by Reuters.

The move is aimed at "maintaining stability on the foreign exchange market", according to the central bank's decree which takes effect from June 29 and gives banks 30 days to adjust their positions.

The limit on short positions remains unchanged at 10 percent of regulatory capital.

The central bank spent an estimated $1.2 billion on interventions to support the local hryvnia currency in the first three weeks of June, analysts say, after it allowed intraday trading.

Last month, the bank said its reserves could come under pressure this year unless the government took steps to restart cooperation with the International Monetary Fund frozen over delayed reforms.

This month, the central bank tightened reserve requirements on short-term borrowings and raised rate ceilings on its deposit certificates, money market instruments used to absorb excessive liquidity.

Copyright Reuters, 2011