Ukraine central bank keeps rates high as warns on economy, currency

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KIEV, March 31 (Reuters) - Ukraine's central bank held its main interest rate at 30 pct, it said on Tuesday, warning inflation was likely to stay high and the hryvnia currency to weaken further as the country's recession deepened.

Following a monetary policy committee meeting last week, the bank said it would not cut the refinancing rate until the hryvnia appeared less at risk.

It raised the rate to 30 percent from 19.5 percent earlier this month to rein in rocketing inflation after the currency fell 50 percent in February on concerns about the durability of a ceasefire in the separatist east of the country.

"There have been signs of a drop in tension on Ukraine's currency market in recent weeks," the bank said in a statement released on Tuesday.

"At the same time, the risks of renewed destabilisation on the money market remain, as well as expectations of high inflation and depreciation."

The bank said it expected the economy to shrink 7.5 percent in 2015, following a 6.8 percent contraction last year, when the conflict with pro-Russian rebels destroyed infrastructure and transport networks in Ukraine's industrial heartland.

Inflation will rise to 30 percent by the end of the year from 24.9 percent in 2014, the bank said.

The hryvnia has recovered from February's weakest point on record at more than 30 to the dollar, and the official rate stood at 23.44 as of Monday.

(Reporting by Natalia Zinets; Writing by Alessandra Prentice; Editing by John Stonestreet)