The karbovanets currency traded at 65,000 per dollar on the Kiev Interbank Currency Exchange -- a sharp drop from the rate of 54,000 set at a central bank currency auction last week.
President Leonid Kuchma two months ago ordered the exchange to reopen, in line with a comprehensive economic reform program Ukraine drafted with the International Monetary Fund.
The exchange is to trade dollars, marks and Russian rubles once a week. It replaces weekly central bank auctions, which were organized as an outlet for enterprises to trade hard currency after the exchange was closed last year.
The rate set on the exchange is closer to a market one, though not completely free. Trading is temporarily regulated by an "expert commission" of central bank and exchange officials, who review contracts to buy or sell currency before trading.
Contracts intended for purchasing consumer goods and for advance payments or to other former Soviet republics are to be given less priority than those for buying fuel, medicines and other strategic goods.
Central Bank Chairman Viktor Yushchenko, who attended the opening session, praised the opening of the exchange and defended the regulations.
"The opening of the exchange is a tremendous event for those who understand Ukraine's new economic situation," Yushchenko said. "Today's rate is regulated, but wisely."
Turnover was $25.06 million, which exchange chairman Vadim Hetman said was surprisingly high considering a last minute scramble to assemble contracts for trading. "Considering the last minute preparations and technical difficulties we did well," said Hetman, who used to head Ukraine's central bank.
Yushchenko, just back from the annual meeting of the IMF, said the rate would be freed after Ukraine received the first $360 million from an IMF loan, expected later this year.
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