The hryvnia traded at 21-23 to the dollar between April and October, but it has weakened below 23 in November, weighed down by Ukraine’s purchases of dollar-denominated gas supplies and a signs of escalating violence in a conflict with pro-Russian separatists.


“The National Bank is closely monitoring the market situation and, if necessary, is ready to use its instruments to smooth excessive fluctuations,” the central bank said.


The hryvnia, which lost half of its value last year and a further 25 percent in early 2015, was trading at 23.84 to the dollar on Tuesday afternoon, down from 23.21 at Monday’s close.


The bank said there were no major fundamental reasons for the recent weakening of the hryvnia as the current account was balanced.


“Because of the small volume of the interbank market, even a minor distortion in supply and demand can cause significant currency fluctuations,” it said. Recent daily trade volume in dollars has stood at $150-$250 million.


The current account deficit narrowed to $2 million in January-September 2015 from $3.2 billion in the same period last year.