Polish rate hikes should help zloty, central bank governor says

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WARSAW, November 24 (Reuters)Recent Polish rate hikes should help the zloty, the central bank governor said in comments on Wednesday, adding that the situation in Poland was not comparable to that in Turkey, where the pound collapsed.

The zloty has hovered around its lowest level in 12 years in recent days, under pressure from a stronger dollar as well as concerns over the growing number of COVID-19 cases and the migration crisis on the Belarusian border.

“The increase in NBP interest rates in recent months and the fact that market participants in their analyzes and assessments assume a scenario of further rate hikes should be favorable to the zloty,” said the governor of the Bank National Polish National (NBP), Adam Glapinski, on the Interia website.

Glapinski answered questions sent by Interia on November 17th. The website said it received its responses on Tuesday.

The zloty EURPLN = had strengthened 0.64% against the euro by 08:47 GMT after Glapinski’s comments.

Soaring inflation and the weakening currency mean that the central bank has been criticized by some economists and sections of the Polish media.

The NBP has carried out two rate hikes in the last two months, bringing its key rate to 1.25%. But it began to raise rates more slowly than other banks in the region and refused to engage in a cycle of hikes.

Glapinski said any comparison with Turkey, where the pound plunged more than 15% against the dollar on Tuesday, was misplaced.

“They are just two different worlds,” he said, adding that the central bank could intervene in the currency market if it deems it necessary.

“Let me also remind you that the exchange rate of our currency is floating, but the NBP reserves the right to intervene in the currency market,” he said.

The governor said concerns about the situation on the Belarusian border should not affect the Polish economy in the long run.

(Reporting by Pawel Florkiewicz, written by Alan Charlish, edited by Catherine Evans and Edmund Blair)

((alan.charlish@thomsonreuters.com; +48 22 104 25 27;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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