Zloty Weakens Before Inflation as Hausner Sees January Rate Cut

The zloty declined for the second day before Polish inflation figures for November are published and as policy maker Jerzy Hausner predicted a third interest rate cut in as many months in January.

The zloty weakened 0.1 percent to 4.0914 against the euro at 10:07 a.m. in Warsaw, reducing this week appreciation’s to 0.7 percent, the biggest gain among 31 major currencies tracked by Bloomberg. The yield on 10-year notes edged up 2 basis points, or 0.02 percentage point, to 3.89 percent.

Poland’s inflation rate is expected to fall to a two-year low of 2.9 percent in the 12 months to November from 3.4 percent in October, according to the median forecast from a Bloomberg survey of 32 economists before the data are published at 2 p.m. The central bank will probably cut rates next month as a “deep” economic slowdown threatens to lower inflation below the bank’s tolerance limit, Hausner said in an interview yesterday.

“If inflation appears lower than market consensus, it may spur a decline in shorter bond yields, as well as a slight weakening of the zloty,” Jakub Borowski, Warsaw-based chief economist at Kredyt Bank SA (KRB), wrote in e-mailed note today.

To contact the reporter on this story: Konrad Krasuski in Warsaw at kkrasuski@bloomberg.net

To contact the editor responsible for this story: David McQuaid at dmcquaid1@bloomberg.net

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