Adam Glapiski: Further weakening of the zloty would not be consistent with the NBP interest rate policy

The tragic situation of the zloty in the currency market deepened throughout Friday. The Swiss Franc broke its all-time high and even reached PLN 4.49 compared to 4.43 the day before. The last time the euro cost over PLN 4.70 12 years ago. The dollar was also more expensive, for which you have to pay PLN 4.16. During the month, the zloty depreciated against the euro by more than 10 groszes, and against the dollar and francs by approx. 20 groszes.

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Glapiński on the situation on the currency market

The president of the NBP, Adam Glapiski decided to refer to the situation on the currency market.

The weakening of the zloty, especially observed in recent days, is probably related to the strengthening of the dollar in the global market. The increase in the value of the dollar usually entails a decrease in the exchange rate of our region’s currencies

– said Biznes Glapiński, quoted by PAP.

Also, analyst Piotr Kuczyński in the commentary for notes that one of the factors of the last zloty depreciation may have been the weakening of the euro against the dollar and other major currencies. He accuses Christine Lagarde, the head of the ECB, for Friday’s slump, who said she saw no reason to raise interest rates. More on this in the article below:

Exchange ratesThe collapse of the zloty. Kuczyński: The NBP intervention should take place a long time ago

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Glapiński believes that also non-banking factors could weaken the zloty.

The marked increase in the number of Covid-19 cases in Europe and Poland may also have a negative impact on the zloty. It may mean the necessity to introduce restrictions, losses for the economy and additional budget expenses. At the same time, the tense situation on the border with Belarus contributes to a certain outflow of capital from the Treasury securities market and the WSE, which is temporary. These phenomena are neither unusual nor dangerous, but they certainly do not help the zloty

– claims the president of the NBP. However, Kuczyński, contrary to Glapiński, does not believe that the weakening of the zloty is a consequence of the migration crisis.

Glapiński ready to intervene on the zloty?

Piotr Kuczyński also told us that he is surprised that the NBP and BGK have not yet intervened to weaken the zloty. And he adds that institutions could sell some of their reserves in euro. Glapiński mentioned it in a statement for PAP Biznes.

Exchange rate changes are natural. However, we reserve the right to conduct foreign exchange interventions, but we do not conduct them without a clear need. (…) However, in the conditions of the current elevated inflation, further depreciation of the zloty would not be consistent with the NBP interest rate policy

– said the NBP president.

Commentary on the words of the head of the NBP on the zloty exchange rate

The journalist Grzegorz Siemionczyk decided that these words can be considered the first reaction to the weakening of the zloty, which was called for by economists.

On the other hand, journalist Marek Chądzyński noted that Glapiński “said for the first time that further zloty depreciation would not be consistent with the NBP interest rate policy.

About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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