The zloty retreated to the lowest level in a week on concern Polish policy makers may seek weaker currency to spur exports as economic growth slows.
The currency lost 0.2 percent to 4.1006 per euro as of 12:20 p.m. in Warsaw, depreciating for a third day. The yield on five-year notes fell two basis points, or 0.02 percentage point, to 4.12 percent, according to data compiled by Bloomberg.
The zloty exchange rate of between 4 and 4.5 per euro is “safe” and gives a “good foundation” for Polish economy, Prime Minister Donald Tusk said in Helsinki yesterday. There was no “economic sense” in trying to encourage appreciation, Deputy Finance Minister Wojciech Kowalczyk told Dziennik Gazeta Prawna in an interview published today.
“We expect to hear more rhetoric to weaken the zloty,” Rafal Benecki, chief economist for Poland at ING Groep NV in Warsaw, wrote in an e-mailed note today. “With more evidence of worsening economic activity the intensity of verbal interventions will grow.”
The International Monetary Fund this week cut Polish economic growth forecast to the slowest pace since 2009. Expansion will slow to 2.4 percent this year and 2.1 percent in 2013, bucking the trend for emerging European economies that are set to expand at faster pace next year.