Ukraine's hryvnia falls to 3-1/2-year low vs dollar

KYIV (Reuters) - Ukraine's hryvnia currency fell to its lowest level since April 2005 on Oct. 1. at 5.11-5.12 against the dollar, according to dealers and Reuters data.

“Demand for the dollar is extremely high. External factors have added to domestic factors. It is defined in the following way -- low liquidity on global financial markets due to the crisis,” one dealer said.

The central bank has said it wants to keep the hryvnia at 4.656-5.044 but has made no move to intervene on the interbank market, Reuters data shows.

Fitch last week cut Ukraine's outlook to negative, warning that there was a rising risk of a currency crisis because of the country's gaping current account and trade deficits at a time when investment and opportunity to borrow may fall.

But the central bank council chief, Petro Poroshenko, said last week he saw no basis for a significant decline of the hryvnia. The bank would therefore not yet intervene, he said then.

Dealers in Kyiv have said they see the hryvnia falling to 5.2 by the end of the year, while foreign analysts predict the currency could ease to 5.6 or weaker in the coming year.

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