UPDATE 1-Ukraine's central bank plays down currency fears, says strains temporary


KIEV, Feb 7 (Reuters) - Ukraine's central bank played down fears about the hryvnia currency on Friday, saying any market strains caused by high demand for dollars were short-term and that its measures would soon bring stability.

Central bank officials said the hryvnia was now at an "adequate" rate after a 10-percent slide since November, when protesters took to the streets over President Viktor Yanukovich's rejection of an EU trade agreement in favour of closer ties with Russia.

"There have been strains on the currency market recently, but we are sure this is only a short-term trend," governor of the National Bank of Ukraine, Ihor Sorkin, told a news conference.

"The national bank will strengthen monitoring control on the market to try to reduce speculative demand ... when the situation improves, the temporary measures will be removed."

The bank said on Thursday it had introduced restrictions on certain types of foreign exchange purchase to help defend the stability of the banking system and would offer extraordinary tenders to support banking liquidity, with funds available up to 360 days.

International bankers said such restrictions would disrupt trade and could create a parallel market in the Ukrainian currency, which the central bank has been struggling to hold steady on a dollar peg.

The hryvnia fell below 9 per dollar on Wednesday for the first time in five years. It was trading at 8.65/8.71 against the dollar at 0910 GMT on Friday.

The head of the bank's monetary policy department, Olena Shcherbakova, said the bank would continue to intervene in the currency markets and the exchange rate for the hryvnia was "adequate" at the moment.

"The situation is completely controllable and manageable," she said, adding there was no need to put any restrictions on individuals' bank accounts to limit withdrawals.