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Polish BGK’s Kowalczyk Sees Zloty Gains on Growing Economy

Feb. 3 (Bloomberg) -- Poland’s zloty may strengthen toward its “fair value” of 4 per euro after last year’s depreciation, as the European Central Bank’s loans stabilize markets and the Polish economy grows, according to Wojciech Kowalczyk, Bank Gospodarstwa Krajowego’s deputy Chief Executive Officer.

The zloty may appreciate to between 3.9 and 4.1 versus the euro, the executive at the state-owned bank that exchanges foreign currencies on behalf of the Finance Ministry said in an interview in Warsaw yesterday. It traded 0.5 percent stronger at 4.1684 against the common currency as of 3:04 p.m. in Warsaw.

The zloty has rallied to a five-month high this week, spurred by Poland’s fastest economic growth since 2008 and record loans advanced to European banks from the European Central Bank, which helped alleviate liquidity concerns stemming from the euro area’s debt crisis. The zloty pared last year’s 11 percent slump versus the euro as the region’s woes spread.

“After such a deep zloty depreciation last year we could see a strong swing in the opposite direction,” Kowalczyk said. “Poland’s fundamental situation is now totally different and there was no justification for the weakening other than external factors.”

BGK and the central bank bought the zloty on the market last year to curb the slide and help prevent the value of Poland’s foreign debt from breaching limits that would trigger compulsory austerity measures.

‘Speculative Investors’

The Finance Ministry tasked BGK with exchanging as much as 14 billion euro ($18.4 billion) on the market last year from the country’s inflows from the European Union. The central bank’s foreign currency sales last year were the first attempt to bolster the zloty since it was floated in 2000.

“Thanks to the central bank’s moves, speculative investors has received a clear signal that they can’t move the market without risk or consequences,” Kowalczyk said. “The cooperation between the central bank and the Finance Ministry is exemplary.”

Polish importers had bought “large quantities” of euro and dollars in December, concerned that the zloty would weaken further, while exporters held off foreign currency sales, according to Kowalczyk. Now, as the zloty strengthens, exporters are more active in the market, he said.

Economic growth will exceed 3 percent this year as the country increases infrastructure investment ahead of Europe’s soccer championships in June and as the 16-team tournament co-hosted by Poland and Ukraine boosts consumption, Kowalczyk said.

To contact the reporter on this story: Piotr Skolimowski in Warsaw at

To contact the editor responsible for this story: Gavin Serkin at

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