- Title: POLAND: Central bank intervenes to curb zloty
- Date: 13th April 2010
- Summary: WARSAW, POLAND (APRIL 10, 2010) (REUTERS) VARIOUS OF NATIONAL BANK NATIONAL BANK SIGN VARIOUS OF PEOPLE AT CASH MACHINE (SOUNDBITE) (English) ECONOMIST OF BRE BANK, PIOTR PIEKOS SAYING: "The National Bank of Poland intervened on the foreign exchange market for the first time in many years, if at all. This action was aimed at stopping the excessive appreciation of The zloty, that happened in the last months. The action of The National Bank of Poland had a dramatic effect on the FX market. The zloty weakened against the euro by five or six groszy in a few minutes we can say." (SOUNDBITE) (English) ECONOMIST OF BRE BANK, PIOTR PIEKOS SAYING: "The action of The National Bank of Poland has the full approval of the Ministry of Finance. We could see a command from the Deputy Finance Minister, Radziwill today. The approval of the ministry of finance is clear because this action supports Polish exporters and this supports the whole economy, and of course in this way it supports the budget." BRE BANK SIGN PEOPLE WALKING
- Embargoed: 28th April 2010 13:00
- Keywords:
- Location: Poland
- Country: Poland
- Topics: Finance
- Reuters ID: LVAD8VBLMQ2EIMH042F5LJXAWFC0
- Story Text: Poland's central bank makes its first intervention in the country's currency since it was floated ten years ago.
Poland's central bank sold zlotys on Friday (April 9), surprising markets with its first intervention since introducing a free float in 2000 as it sought to temper the surging currency's impact on exports and the wider economy.
The central bank said in a statement it had bought "some currencies" on the market around Friday. It gave no other details, but a Warsaw-based dealer said he believed the central bank bought about 40-50 million euros for zlotys.
The action, which the government said it backed fully, drove the zloty down 0.5 percent against the euro, though economists said the currency might strengthen again.
The European Union's biggest ex-communist member, Poland is the only country in the bloc to have avoided recession last year and currency investors have taken note.
Before Friday's move, the zloty had gained 6 percent against the euro in the year so far and was near a 16-month high.
"This action was aimed at stopping the excessive appreciation of The zloty, that happened in the last months. The action of The National Bank of Poland had a dramatic effect on the FX market. The zloty weakened against the euro by five or six groszy in a few minutes we can say," said Piotr Piekos, an economist with Bre bank.
The country's robust growth prospects stand in stark contrast to a number of European countries, notably peripherals such as Greece or Spain.
Poland's debt levels are also well below the EU average, making Polish debt attractive to investors.
"....this action supports Polish exporters and this supports the whole economy, and of course in this way it supports the budget," Piekos said Deputy Finance Minister Dominik Radziwill said the intervention was a beneficial move.
"This is definitely a beneficial move. It's a factor that the market needs to take into account in its analysis. We fully agree with the central bank's policy on that matter," he told Reuters by telephone.
At 1305 GMT, the zloty was at 3.8720/50 per euro, sharply weaker than 3.8340 earlier on Friday.
The currency's strength has prompted concern that Poland could pay an economic price as zloty gains have made exports less competitive. - Copyright Holder: REUTERS
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