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Zloty Jumps Most in One Month as ECB Agrees to Bond Buying Plan

Sept. 6 (Bloomberg) -- The zloty rallied the most in a month after the European Central Bank announced an unlimited bond-purchase plan to help control borrowing costs in the euro area’s most-indebted nations, boosting risk appetite.

The zloty jumped 1.4 percent to 4.1240 per euro as of 5:46 p.m. in Warsaw, the steepest gain since Aug. 3 and the biggest advance among more than 170 currencies tracked by Bloomberg. The yield on 10-year notes fell one basis point, or 0.01 percentage point, to 4.82 percent.

ECB President Mario Draghi said the bank will target government bonds with maturities of one to three years, including longer-dated debt that has a residual maturity of that length. Purchases will be fully sterilized, meaning the overall impact on the money supply will be neutral, and the ECB will not have seniority, he said. The euro area is Poland’s biggest trading partner.

“The ECB has delivered a mildly positive signal for risky assets, which should benefit emerging markets high-beta currencies,” Benoit Anne, head of emerging markets strategy at Societe Generale SA in London, wrote in an e-mailed note to clients.

To contact the reporter on this story: Piotr Skolimowski in Warsaw at pskolimowski@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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