Zloty Drops to Weakest in Month on Syria Concern: Warsaw Mover

The zloty depreciated to the weakest level since the beginning of the month as concern that Syria’s crisis will escalate overshadowed improved business confidence in Poland’s biggest trading partner.

The currency declined 0.4 percent to 4.2494 against the euro as of 4:19 p.m. in Warsaw, the weakest since Aug. 1. The yield on Poland’s benchmark 10-year zloty bond was unchanged at 4.42 percent, while the rate on the country’s dollar note due in March 2023 declined three basis points, or 0.03 percentage point, to a one-week low of 4.48 percent.

U.S. Secretary of State John Kerry said yesterday Syria will be held accountable for using chemical weapons. Worry that conflict in the Middle East will intensify “outweighs” an Ifo institute report today showing German business confidence rose to a 16-month high in August, Rafal Benecki, chief economist at ING Bank Slaski SA in Warsaw, wrote in an e-mailed note.

The government “is happy with the stable zloty exchange rate compared with other emerging-market currencies,” Deputy Finance Minister Wojciech Kowalczyk told reporters in Warsaw today, adding it highlights “strong Polish fundamentals and investor belief in economic recovery.”

Polish retail sales rose 4.3 percent year on year in July, the fastest growth in 12 months, the Central Statistical Office said yesterday. The office will give full second-quarter gross-domestic product data on Aug. 30. A preliminary estimate published on Aug. 14 showed the economy grew 0.8 percent, compared with 0.5 percent in the previous quarter.

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