Polish Zloty Falls as Secret Tapes Spur Call for Early ElectionAndras Gergely
Poland’s zloty fell, extending this week’s decline, on concern leaked tapes of conversations between a government minister and the central bank chief may force early elections. The nation’s 2023 Eurobond was little changed.
The currency lost 0.3 percent to 4.14 per euro, bringing this week’s decline to 0.5 percent, at 5:35 p.m. in Warsaw, the most after Turkey’s lira among 14 peers in developing Europe monitored by Bloomberg. The yield on the government’s dollar-denominated bonds due March 2023 rose less than one basis point to 3.45 percent, bringing this week’s increase to nine basis points. Polish markets were shut for a holiday today.
The zloty headed for its second week of losses after Wprost magazine released recordings on June 14 in which central bank Governor Marek Belka was heard discussing with Interior Minister Bartlomiej Sienkiewicz steps to boost the economy and help the government win an election next year. Poland may be forced to hold a snap ballot, Prime Minister Donald Tusk said today.
“Given the local developments, my bias is going to be less enthusiastic beyond this immediate market response towards zloty assets relative to others,” Benoit Anne, the London-based head of emerging-markets strategy at Societe Generale SA, said by e-mail today.
A chorus of voices endorsing early elections in Poland shows the failure to contain the eavesdropping scandal by Tusk, who in 2011 became the first Polish premier to win a second term since the end of communism a quarter-century ago. The nation may have to set in motion “the mechanism of democratic elections” in response to an “extraordinary situation,” President Bronislaw Komorowski said in remarks on TVN24 today.