KIEV, Feb. 13 ??“ More than half of the foreign currency inflow to Ukraine in January came from exports, according to a report by the National Bank of Ukraine.

"Over half of the foreign currency inflow to the country was from exports ... [while] foreign borrowing, although it fell compared to December 2006, remained the second biggest source of foreign currency," the NBU said.

The central bank said that the currency inflow to Ukraine last month grew by 36% year-on-year.

"In early 2007, a seasonal fall in business activity was seen, which resulted in a cut in foreign currency inflows to the country: its inflow in January fell by 25% compared to the previous month, although year-on-year it grew by 36%," reads the report.

According to the report, currency supply on the interbank market in January mainly exceeded demand: only for several days in the middle of January did demand for dollars exceed supply, with a rise in the exchange rate to UAH 5.07/$1.

"The National Bank's presence on the market prevented significant hryvnia exchange rate surges. In January, the NBU bought over $233 million," the report said.

The NBU's forex reserves last month grew by $106 million, to $22.3 billion. In January, a total of $71 million were allocated to service and pay off the state foreign debt.

In January a fall in the public activity was seen on the currency market, which is normal for the first month of the year.

"From the second half of January, supply exceeded demand for dollars on the cash market," reads the report.

The NBU said that the fall in demand for dollars was linked to a fall in the volume of cash hryvnia owned by the public after active spending during the holidays in early January. The bank said that net demand for foreign currency on the cash market in January fell to $177 million from $572.5 million in December.

"The deviation in the hryvnia exchange rate to the dollar on the cash market from the official exchange rate did not exceed 0.6%. In the past month the hryvnia exchange rate to the dollar has not changed much, while the hryvnia exchange rate to the euro fell by 1.4%, to UAH 6.58/$1," the report said. (om/ez)