Polish officials put a brave face on the zloty’s rapid depreciation sparked by an unexpectedly large interest-rate cut a week ago.
(Bloomberg) — Polish officials put a brave face on the zloty’s rapid depreciation sparked by an unexpectedly large interest-rate cut a week ago.
Central bank policymaker Wieslaw Janczyk told PAP news agency in an interview on Wednesday that the current currency valuation “appears to be beneficial” for Polish exporters given the weakness in factory orders in Germany, the country biggest trading partner.
Deputy Finance Minister Artur Sobon, meanwhile, told public radio that there was no reason to be “overly concerned” about the zloty after its strong appreciation earlier in the year.
The zloty suffered its steepest daily slide since Russia’s invasion of neighboring Ukraine last week and has lost 4% against the euro since the central bank slashed rates by three quarters of a percentage point last Wednesday.
Read more: Zloty Slide Sends Warning Across EU’s East on Rate Cut Risks
The move, which was triple what most economists predicted, fueled speculation that Governor Adam Glapinski was acting out of political expediency to help the ruling Law & Justice party win a parliamentary election on Oct. 15. He dismissed such criticism last week, saying policymakers were acting in response to rapidly declining inflation and the cut was overdue.
The currency weakened 0.3% to 4.6744 against the euro at 8:38 a.m. in Warsaw.
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