Zloty Weakens as Yields Drop Before Interest-Rate Decision
The zloty slipped and the yield on Polish 10-year notes fell for a third day amid speculation the central bank will cut interest rates today to boost the economy.
The zloty retreated 0.2 percent to 4.1169 per euro as of 11:53 a.m. in Warsaw. The yield on notes maturing in October 2023 dropped two basis points to 3.75 percent, extending this week’s decline to 20 basis points, or 0.20 percentage point.
Policy makers will probably lower borrowing costs by a quarter of a percentage point for the third month today to spur economic growth, according to all 33 economists surveyed by Bloomberg. The decision will come around midday in Warsaw, followed by Governor Marek Belka’s press conference at 4 p.m.
“The zloty will be sensitive to what the central bank will say,” Joanna Bachert, an analyst at PKO Bank Polski SA, said in an e-mailed report today. “Dovish comments would be taken by the market as a sign the next cut will come already in February.”
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