The weakening of the zloty, especially observed in recent days, is probably related to the strengthening of the dollar on the global market – informed the NBP president Adam Glapiński. He noted that the PLN exchange rate is floating and if market factors speak for changes in the exchange rate, especially if they are not too strong, then it is difficult to expect a reaction from the NBP.
- At the peak of the Friday’s afternoon session, the EUR / PLN rate reached 4.69 and set a new 12-year high
- The President of the NBP noted that the central bank did not intervene in the currency market this year, but still reserves the right to do so
- More such stories can be found on the main page of Onet.pl
“As a rule, we do not comment on changes in the zloty exchange rate, but in recent days the zloty has actually weakened, and we are constantly analyzing the factors behind it. The weakening of the zloty, especially observed in recent days, is probably related to the strengthening of the dollar on the global market. the value of the dollar usually entails a decrease in the exchange rate of our region’s currencies. The zloty may also be adversely affected by a marked increase in the number of COVID-19 cases in Europe and Poland. This may mean the necessity to introduce restrictions, losses for the economy and additional budget expenses “- wrote Glapiński .
– 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 are neither unusual nor dangerous phenomena, but they certainly do not help the zloty, said the NBP governor.
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“As for the comments that the zloty is weak because – in contrast to the central banks of the Czech Republic and Hungary – the NBP does not clearly declare the cycle of interest rate increases, this is a misguided argument. It is not even about the fact that in the last 10 days, for example, the zloty depreciated against the euro more than the Czech koruna, but less than the forint. I explained why we are not making strong statements about future decisions. At the same time, however, in the last interview for PAP I emphasized that if the incoming data confirm the current assessment of the situation, the probability of further interest rate adjustments is higher than keeping them at the current level, “he added.
“Market participants therefore expect NBP interest rate increases, and the rates expected by the market are much higher than the current ones. In other words, this factor should not be conducive to the weakening of the zloty, Glapiński stated.
Strong weakening of the zloty
Since morning the zloty depreciates against all major currencies to long unseen levels. At the peak of the Friday’s afternoon session, the EUR / PLN rate reached 4.69 and marked a new 12-year high. USD / PLN was traded at 4.16 – the highest level in a year. As part of Friday’s strengthening the dollar tested the level of 1.125 / EUR – the lowest level in a year.
Ok. time. 16.00 the EUR / PLN exchange rate is 0.3%. above the line, around 4.685, USD / PLN grows by 0.9%. to 4.143, and EUR / USD decreased by 0.6%. to 1.131.
The President of the NBP noted that the central bank did not intervene in the currency market this year, but still reserves the right to do so.
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“The zloty exchange rate is floating and if market factors speak for changes in the exchange rate, especially if they are not too strong, it is difficult to expect our reactioni. Rate changes are natural. However, we reserve the right to conduct foreign exchange interventions, but we do not conduct them without a clear need. Foreign exchange interventions are also not excluded from other central banks, especially in smaller, open and developed economies. They often use this right to intervene, sometimes much less restrainedly than the NBP. Let me repeat that this year the NBP did not intervene, it is difficult to maintain that we are acting towards weakening the zloty or we prefer the weak zloty “- wrote Glapiński.
“The exchange rate obviously has an impact on import prices, but this impact should not be overestimated. I said that even a relatively strong appreciation of the zloty would not significantly reduce inflation, but would be costly for the economy. However, in the conditions of the current elevated inflation, further depreciation of the zloty would not be consistent. with the NBP interest rate policy, “he added.