KIEV, Nov. 13 – Ukraine’s currency, the hryvnia, fell to its lowest level in three years against the U.S. dollar Tuesday amid a widening trade deficit and speculation the authorities may be preparing a major devaluation.

The hryvnia closed at 8.30 to the U.S. dollar in trading between commercial banks on Tuesday, compared with 8.21/dollar on Monday, dealers said.

“Unfortunately, demand for hard currency has been steadily exceeding supply on the interbank market, creating devaluation pressure on the hryvnia,” Serhiy Korablin, the head of the analysis and forecast department at the National Bank of Ukraine, said, Unian reported.

The hryvnia’s drop comes amid weeks of speculations that the NBU, long with the government, have been preparing to devaluate the hryvnia in a desperate attempt to improve the foreign trade balance.

Prime Minister Mykola Azarov has repeatedly denied the plans and blamed opposition politicians for instigating pessimistic mood on the market for political gains.

The government kept its forecast of the dollar/hryvnia foreign exchange rate secret ahead of the October 28 parliamentary elections.

But opposition figures, such as lawmaker Serhiy Teriokhin, a former economy minister, said recently the government will struggle to keep the current value of the hryvnia because the government is due to pay out $11 billion in foreign debts in early next year.

Teriokhin predicted the hryvnia may trade at 10 hryvnias to the dollar in January 2013 because the NBU was unlikely to tap its foreign exchange reserves to prop up the local currency.

Meanwhile, the hryvnia’s plunge comes after data has been released showing Ukraine’s deficit in foreign trade with goods and commodities has widened to $11.47 billion in January through September. The data, released by the State Statistics Committee, underscores Ukraine’s reliance on imports of Russian natural gas.

Ukraine’s imports of goods and commodities rose 4.7% on the month to $62.27 billion in January through September, while exports rose 1.8% to $50.79 billion in the same period, the committee reported.

Echoing these concerns, Azarov has recently told a government meeting that the economic situation in Ukraine was “not only bad, but very bad.”

The International Monetary Fund has long recommended Ukraine to adopt a floating exchange rate, allowing the hryvnia to depreciate or appreciate against the dollar in response to trade data and economic performance.

The floating exchange rate would the Ukrainian economy, which is too heavily dependent on exports of goods and commodities. (tl/ez)