KIEV -- Ukraine's Central Bank chairman Viktor Yushchenko says he expects 1995 to be a year of success for the economy and that the country's interim karbovanets currency will stabilize after three turbulent years.


Inflation in December will slow to 25 to 28 percent from November's 72 percent, he said in an interview this week.


"The year 1995 will be one of success for our economy. Without a stable national currency we cannot have a strong economy, so we will conduct a strict monetary policy," Yushchenko said.


"The karbovanets has entered a period of short-term stabilization and we see no problem in the medium term."


The government has said it intends to introduce a new, permanent currency, the hryvna, next year -- but only after the karbovanets proves its stability.


The karbovanets flattened out against the dollar this month after plunging in November, when the government began freeing prices on heavily subsidized goods and services.


The Ukrainian currency, introduced nearly three years ago to replace the Soviet-era ruble, has traded at 104,200 per dollar for the past two weeks on the Kiev Interbank Currency Exchange. The dollar fetches about 130,000 on Kiev streets.


Yushchenko said the bank spent no hard currency to support the karbovanets on the exchange for four weeks. "In fact the Central Bank has become the main purchaser of hard currency on the exchange, buying about 50 to 60 percent of the hard currency on offer."


The $50 million purchased so far has gone to the Central Bank's hard currency reserve and has been used to pay off part of the International Monetary Fund's first $371 million loan to Ukraine, he said.


But Yushchenko warned that future stability of the karbovanets will depend on the 1995 budget, still to be debated by the largely conservative parliament.


The government's draft envisages a budget deficit of no more than 10 percent of gross domestic product, he said.


"Otherwise, everything is going according to plan. Inflation will rise again in February, but after that we can forget about inflation. By May, monthly inflation will be five percent," he said.


Senior officials have said the government aims to reduce monthly inflation to between 1percent and 3 percent by the fourth quarter. That is in line with IMF demands for a $1.5 billion standby loan agreement, currently under negotiation.


Yushchenko also said Ukraine attracted $1.4 billion in foreign private investment in 1994.