Ukraine raises key interest rate to fight financial crisis

French President Francois Hollande (R) welcomes Germany's Chancellor Angela Merkel as she arrives at the Elysee Palace before the solidarity march (Rassemblement Republicain) in the streets of Paris January 11, 2015. REUTERS/Pascal Rossignol

KIEV (Reuters) - Ukraine's central bank announced on Thursday a big increase in its main interest rate to 19.5 percent to try to avert financial collapse, brought ever closer by fighting in the country's east and a lack of foreign funding.

With the hryvnia currency declining rapidly and foreign exchange reserves running at $7.5 billion (5 billion pounds) last year - barely enough to cover five weeks of imports - the central bank has few ways to revive an economy on the brink of bankruptcy.