Polish Bond Yields Drop to Four-Month Low as Zloty Rallies

Polish bond yields dropped to a four-month low and the zloty gained after the government said it met a third of this year’s financing needs and Greece made progress on debt-swap talks with creditors.

The yield on notes maturing in October 2021 declined six basis points to 5.60 percent, the lowest since Sept. 8, as of 11:15 a.m. in Warsaw. The yield has slumped 29 basis points in January, the biggest monthly drop since August 2010. The zloty appreciated 0.6 percent to 4.2285 per euro today, the steepest gain among 25 emerging-market currencies tracked by Bloomberg.

Greek Prime Minister Lucas Papademos said he’s “strongly committed” to reaching an agreement with creditors, helping the euro rebound from its biggest decline versus the dollar yesterday in two weeks. Poland had a “significant” inflow of foreign capital to its bond market in January as the government sold debt in zloty, euros and dollars, Piotr Marczak, head of the Finance Ministry’s public debt department, said yesterday.

“We have a bit of euphoria going,” Mateusz Milewski, senior fixed-income trader at Bank Gospodarki Zywnosciowej SA, said by phone from Warsaw. “There is more optimism about Europe and the ministry has made a lot of progress in financing its needs so the sentiment is positive.”

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