KIEV, Oct. 30 – The hryvnia recovered against the U.S. dollar Thursday after a massive intervention by the National Bank of Ukraine, marking a shift in its strategy towards aggressive defense of the national currency from its slump.

The NBU “flooded” the forex market with dollars at 6.05 hryvnias to the dollar on the scale that dealers called “largest-scale,” helping the hryvnia reclaim some ground after its recent rapid decline.

“The market appears to be flooded with dollars,” one dealer said Thursday. “Obviously, [the NBU] was told to do something about the collapsing hryvnia.”

President Viktor Yushchenko had an emergency meeting with Volodymyr Stelmakh, the NBU governor, other NBU officials and top managers of the biggest commercial banks on Thursday, seeking to stop the hryvnia’s further slump.

“A complex of measures has been approved affecting operation of the NBU and commercial banks. The hryvnia’s decline will be stopped. The hryvnia will start recovering,” Petro Poroshenko, the head of the NBU’s Council, a strategic policy body, said after the meeting.

Yushchenko, himself a respected former governor of the NBU, is expected to make a statement on Friday concerning the developments on the financial markets, Poroshenko said, refusing to elaborate.

The hryvnia has been under serious downward pressure over the past four weeks due to rapidly falling steel exports, Ukraine’s main source of hard currency, which, coupled with international credit crunch, has been fueling financial crisis.

The hryvnia lost about 25% of its value against the dollar over the past 30 days.

The NBU spent $5 billion over the past four weeks, a huge amount by Ukrainian standards, but the efforts had so far failed to stabilize the markets, and the hryvnia had lost value rapidly over the past two days.

The hryvnia plunged from 6.30/dollar on Tuesday to 7.20/dollar on Wednesday, the worst daily decline over the past decade, after comments by Stelmakh that Ukraine may default on debts unless the country secures $16.5 billion loan from the IMF.

On Thursday the hryvnia opened at 6.90-7.02 to the dollar and quickly recovered to 6.20-6.45 to the dollar amid rumors the NBU was about to launch the intervention that would dwarf its previous efforts.

Shortly afterwards, the NBU started to sell dollars “in unlimited amounts” at 6.05 hryvnias to the dollar, hurting speculators that had been betting on fast depreciation of the hryvnia, dealers said.

At the same time, the NBU stepped up its efforts to sell dollars on the cash market in a bid to calm down the panic.

Vasyl Horbal, a member of the NBU’s Council and the owner of UkrGazBank, one of the largest banks, who also joined the meeting with Yushchenko, said commercial banks will be selling dollars on Friday at 6.30/dollar. (nr/ez)