Zloty Advances After Polish Central Bank Cuts Rate as Predicted
The zloty advanced after the Polish central bank cut interest rates by quarter of a percentage point in a sign policy makers will move gradually to reduce borrowing costs.
The zloty added 0.3 percent to 4.1204 per euro as of 1:37 p.m. in Warsaw. The yield on five-year notes stayed two basis points higher at 3.60 percent following the decision.
The central bank cut borrowing costs for a second month to spur growth in the European Union’s biggest eastern economy, which faces the risk of its first recession in two decades. The decision matched the forecasts of 33 of the 35 economists surveyed by Bloomberg. Two predicted a 50 basis-point increase. Policy makers will explain the decision at a news conference at 4 p.m. in Warsaw.
“Predictably the zloty strengthened as this was pretty much priced in,” Timothy Ash, head of emerging-market research at Standard Bank Group Ltd., said in an e-mailed comment. “It leaves scope for more rate cuts and portfolio inflows.”
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