Zloty Falls for Third Day as Piechocinski Favors Weaker Currency

The zloty declined for a third day after Economy Minister Janusz Piechocinski said a weaker currency would be good for Polish exporters.

The zloty slid 0.2 percent to 4.1189 per euro as of 5:28 p.m. in Warsaw. The yield on 10-year notes fell 5 basis points to 3.98 percent.

It would be “good” if the zloty depreciated further and the level of 4.30 to 4.38 per euro would “guarantee real profitability” for exporters, Piechocinski told the Rzeczpospolita newspaper in an interview published today. His comments come after Hungary’s Economy Minister Gyorgy Matolcsy said last week he opposes a strong-forint policy to fight inflation while the Czech central bank is considering steps to weaken the koruna to boost the economy. The three central European countries rely on the recession-stricken euro area for most of their exports.

“The zloty and other regional currencies are now ripe for a correction,” Timothy Ash, head of emerging-market research at Standard Bank Group Ltd. in London, said in an e-mailed comment today. “We are now seeing active verbal intervention by policy makers to talk currencies weaker.”

The zloty, the world’s best-performer last year, will weaken to 4.25 per euro by the end of June, according to ING Groep NV, which came the closest to predicting zloty-euro moves in the past six quarters, data compiled by Bloomberg show.

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