Ukraine’s central bank will raise its benchmark refinancing rate to 30 per cent from 19.5 per cent, the head of the central bank said on Tuesday, as the bank tries to rein in rocketing inflation and persistent currency weakness.

The hryvnia has halved in value so far in 2015, having weakened 50 per cent last year, and is at record lows below 30 to the dollar after a year of political upheaval and conflict that has pushed the ex-Soviet republic to the brink of bankruptcy.

The new interest rate, which comes into effect on Wednesday, is the highest for 15 years.

Central bank chief Valeriia Gontareva said in a media briefing that the decision was taken because the bank saw the “threat of inflation had risen strongly due to negative consequences from currency market panic”.

The bank will also extend a rule obliging companies to sell 75 per cent of their foreign currency earnings among other measures to help stabilise the hryvnia, which Gontareva said she hoped would return to a level of 20-22 to the dollar “quickly”.

A trader at one Ukrainian bank said it was too soon to say what effect the moves would have on the currency, as demand was low due to strict rules on foreign currency purchases for importers. “Everyone is waiting for the central bank to come onto the market. The rate it buys at will be the rate. It’s not a real market when there are sellers, but the buyers are restricted by a pile of paperwork,” the trader said. On Monday, the average rate of bank trades for Ukraine’s hryvnia registered by the central bank stood at 24.66 to the dollar from 26.86 at the open, in low volumes.