KIEV, Dec. 22 – The National Bank of Ukraine on Monday purchased $130 million on the forex market, a move to prop up the hyryvnia and a sign of the extent to which the supply of hard currency has been exceeding demand.

The latest intervention brings to $272 million the amount of dollars that has been purchased by the NBU over the past two trading sessions, signaling an end to the hryvnia’s fast depreciation.

“Tomorrow, the NBU will increase the pressure on the exchange rate through its interventions,” Valeriy Lytvytskiy, the chief advisor to the governor of the NBU, told Interfax-Ukraine.

The hryvnia closed at 8.30 hryvnias to the dollar in trading between commercial banks on Monday, gaining 4% against the dollar since Friday and almost 10% since Wednesday, dealers said.

The hryvnia has been making steep fluctuations in value over the past seven days, falling sharply last week to 9.30 hryvnias against the dollar and triggering a debate between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko.

Tymoshenko alleged that the office of Yushchenko – jointly with the National Bank of Ukraine - had been overseeing a complicated operation to knock down the local currency in order to make the prime minister’s life more difficult.

Yushchenko, in response, blamed Tymoshenko for running a populist and controversial economic policy over the past 12 months that had spurred inflation, led to ballooning foreign trade deficit and contributed to the depreciation of the hryvnia.

The hryvnia lost 43% of its value against the dollar over the past three months, one of the worst such indicators in the world, suggesting that domestic factors – in addition to the international credit crunch - had played a role in the depreciation.

The sharp attacks between Yushchenko and Tymoshenko were caused by the onset of the presidential race as both apparently seek to run at the presidential election due in January 2010, analysts said.

Yushchenko has been meeting Volodymyr Stelmakh, the governor of the NBU, repeatedly over the past seven days, to map out strategy for the central bank’s reaction to the financial crisis.

A set of measures implemented by the NBU on Thursday has apparently helped to stop the panic and had increased supply of dollars on the forex market, Stelmakh told Yushchenko at their latest meeting on Monday.

“The trend on the forex market has changed completely,” Stelmakh said, according to Yushchenko’s press service. “Last Friday the people had sold more dollars then they bought. The exchange rates have changed sharply as the national currency had strengthened.”

Yushchenko urged Stelmakh to improve transparency of the NBU’s strategy as the central bank had been taking steps to defend the local currency.

The NBU on Monday kept the hryvnia’s value at 7.87 hryvnias to the dollar - unchanged since Friday - as the official exchange rate, which is used by many businesses as an indicative exchange rate and for settlements with the budget. (tl/ez)