KIEV, Nov. 4 – President Vitor Yushchneko on Tuesday praised the National Bank of Ukraine for interventions and other measures as latest statistics indicate the panic on the financial market has apparently started to fade.

The NBU increased hard currency interventions over the past several days to support the hryvnia, while at the same time providing liquidity to commercial banks easing the crunch.

“The NBU has actively spent the last one-to-two days on the forex market and demonstrated that agreements with commercial banks today have concrete and positive results,” Yushchenko said at a press conference.

“We received statistics - about three hours ago - showing that the people’s deposits in commercial banks had increased by 2 billion hyrvnias over the past four days,” he said.

The figures suggest a turnaround in the people’s mood after depositors had withdrawn more than 20 billion hryvnias from commercial bank in early October.

The statistics may be a sign the measures announced by the NBU on October 30 have been finally working, easing the crisis that had already led to a 25% depreciation of the hryvnia against the dollar since early October.

The NBU has been initially making little progress in tackling the crisis despite the interventions exceeding $5 billion as the panic has been quickly spreading throughout the country.

The NBU has been spending hard currency only to those businesses that had been importing energy and other important resources, while restricting purchased by others.

This tactic, however, spurred major panic, with the hryvnia plummeting to the record of 7.20 hryvnias to the dollar in trading between commercial banks, compared with 4.85 hryvnias/dollar in September.

But the NBU was forced to change the tactic after a meeting with Yushchenko last week, also joined by the country’s biggest commercial banks, as all have agreed to launch a coordinated campaign to stop the panic.

The NBU, which has about $33 billion in foreign exchange reserves, started to sell dollars in “unlimited” amounts, also targeting cash market, quickly stabilizing to the hryvnia at about 5.9 hryvnais to the dollar.

The hryvnia settled at 5.82 hryvnias to the dollar in trading between commercial banks on Tuesday. The NBU spent $100 million to bridge the gap between demand and supply, dealers said.

The hryvnia was also helped by the fact that Parliament approved a package of anti-crisis legislation on Friday, opening way for $16.5 billion emergency loan from the International Monetary Fund.

The IMF’s executive board is expected to meet on Wednesday in Washington to decide on whether to release the loan for Ukraine.

Parliamentary Speaker Arseniy Yatseniuk, a former governor of the NBU that had successfully managed to stop a run on the hryvnia in November 2004, had left for Washington for talks to secure the loan.

“We are currently within standard parameters of depreciation of [some of local currencies] in the world,” Yatseniuk said Tuesday. “The exchange rate that we have now may change by 5-7% by the end of the year, but this is not critical.” (tl/ez)