March 5 (Bloomberg) -- The zloty is heading for a six-week high on speculation that Poland’s policy makers will end a series of interest rate cuts at tomorrow’s meeting.
The zloty strengthened 0.2 percent to 4.1352 per euro at 10:16 a.m. in Warsaw, on course for the highest close since Jan. 17. The yield on the government’s two-year bond fell two basis points, or 0.02 percentage point, to 3.54 percent.
Poland’s Monetary Policy Council (MPC) will probably deliver a quarter-point cut in interest rates to 3.5 percent tomorrow, according to 22 out of 38 economists surveyed by Bloomberg. The remaining 16 expect rates to stay unchanged after four quarter-point reductions in as many months.
“The council will cut rates by 25 basis points for the fifth month in a row and at the same time signal a switch to a neutral ’wait-and-see’ approach, which -- given the market’s more aggressive expectations regarding further cuts -- should strengthen the Polish currency,” Bank Millennium SA economists, led by Grzegorz Maliszewski, wrote in a note.
The rate-setting council was unanimous in ordering a 25 basis point rate cut in January, press agency PAP said today, citing voting records published in the government’s Judicial and Economic Monitor. The vote was 9-0 with Zyta Gilowska absent, the record showed.
“We stick to our view that rates will be reduced by 25 basis points for the last time in the cycle,” Bank Pekao SA economists, led by Marcin Mrowiec, wrote in a note.
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