The zloty weakened for the first time in three days as Andrzej Raczko, a member of the central bank’s management board, said short-term depreciation of the currency was “desirable.”
The Polish currency retreated 0.3 percent to 4.1468 per euro as of 5:03 p.m. in Warsaw. That pared this year’s appreciation to 7.7 percent, still the third-steepest gain among more than 20 emerging-market currencies tracked by Bloomberg after the Hungarian forint and Chilean peso. The yield on five-year notes rose two basis points, or 0.02 percentage point, to 4.13 percent.
A weaker zloty in the short term would help promote Polish exports during a slowdown, Raczko, who isn’t a member of the central bank’s rate-setting council, said at a panel discussion in Warsaw today. If the currency depreciates over the long term, it would be detrimental for the economy, he said. Poland’s economic expansion slowed to its weakest pace in almost three years in the second quarter as the debt crisis in the euro area, its main trading partner, curbed demand.
“The zloty depreciation would be the only fast way to spur recovery in the economy” as interest rates are “high,” Piotr Kalisz and Cezary Chrapek, economists at Citigroup Inc.’s Polish unit wrote in an e-mailed report today. “The pressure to weaken the zloty will grow with time.”