The zloty advanced from the the lowest level in four weeks after Polish central bank Governor Marek Belka was reported as saying the current exchange rate “certainly” isn’t hurting exports.
The zloty appreciated 0.5 percent to 4.1397 per euro as of 10:24 a.m. in Warsaw, snapping four-day losing streak. It has the second-steepest gain among more than 20 emerging-market currencies tracked by Bloomberg. The yield on two-year notes increased two basis points to 3.91 percent.
It isn’t clear if a weaker zloty would boost economic growth as greater profits for exporters would be offset by weaker domestic consumption, Belka was reported as saying in Gazeta Wyborcza. He also said a cut in interest rates now would be a “natural” consequence of the slowdown, although the economy remains in “good shape” and may recover faster than its western European counterparts, according to the newspaper.
“The currency may come under pressure in the next two- three months as the easing cycle is set to begin,” Janusz Dancewicz, chief economist at DZ Bank Polska SA in Warsaw, wrote in an e-mailed note to clients today.
To contact the reporter on this story: Piotr Skolimowski in Warsaw at firstname.lastname@example.org
To contact the editor responsible for this story: Gavin Serkin at email@example.com