Zloty Weakens 2nd Day, Bond Yields Fall as Inflation Slows
Poland’s currency headed for the lowest close in more than two weeks after a sharper-than- expected slowdown in price growth fueled bets record-low interest rates will be reduced further.
The zloty depreciated 0.1 percent to 4.1620 against the euro at 10:15 a.m. in Warsaw today, after weakening 0.5 percent yesterday, the most among emerging-market currencies after South Korea’s won. Two-year bond yields fell for a fourth day, dropping one basis point to 3.27 percent.
The currency’s decline is “the aftermath of lower CPI and fears of new rate cuts,” Karol Zaluski, ING Bank Slaski’s chief foreign exchange dealer, said by e-mail today. “The relatively weak current account and expectations of weak data in the future” adds to the negative picture, he said.
Polish consumer prices rose 1.3 percent in February from a year earlier, the smallest advance since October 2006, missing the 1.5 percent median estimate from a Bloomberg survey of 36 economists. Poland’s current account deficit widened to 1.5 billion euros in January from 1.2 billion euros in the prior month.
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