On Wednesday we observe a strong appreciation of the zloty. The Polish currency gains against the euro, US dollar, Swiss franc and British pound. – December started well for the zloty – said Mateusz Sutowicz, economist of Bank Millennium. According to Maciej Madej from Dom Maklerski TMS Brokers, “the moods on the zloty market have clearly improved, as the actions of the NBP (and also the government) show the will to strengthen the currency”.
On Wednesday around At 5.15 p.m. for the euro you had to pay PLN 4.61, the lowest level since November 11. The US dollar cost PLN 4.07, the Swiss franc – almost PLN 4.43, and the British pound – about PLN 5.43.
– December started well for the zloty – today we see strong strengthening. The EUR / PLN exchange rate, dropping even 1.5 percent, reached 4.6050. It is quite a move, because until recently we were over 10 cents higher. I would not associate it with local factors, as a similar trend is visible throughout our region – assessed Mateusz Sutowicz, economist at Bank Millennium.
However, Poland stands out positively as the leader of this strengthening. “I admit that it is quite peculiar. On Friday, the omicron trend began, which was not favorable for risky assets, which include the zloty” – noted Sutowicz.
According to the economist, however, a correction to the Polish currency is possible. – Monday brought optimism in our region and this tendency continues regardless of a stronger dollar or cheaper oil. It seems that the zloty appreciation may even be too strong, and the last two sessions this week may bring an attempt at a correction in this move. Especially in anticipation of the outcome of the Monetary Policy Council meeting next Wednesday, he assessed.
The President of the National Bank of Poland “tries to strengthen the PLN verbally”
Meanwhile, Maciej Madej from Dom Maklerski TMS Brokers “moods on the zloty market clearly improved, as the actions of the NBP (and also the government) show the will to strengthen the currency”. “The zloty has received a lot of support from the central bank in recent days. In the media offensive, President Glapiński is trying to strengthen the zloty verbally. In an interview on Wednesday, he admits that there is space for raising interest rates in Poland, although it is not unlimited” – wrote Madej in a commentary.
On Tuesday, the Central Statistical Office released preliminary data on inflation in November this year. According to estimates, the year-on-year increase in prices was 7.7 percent. According to Madej, after the new CSO data “it is almost certain that the MPC will decide to continue the cycle of interest rate hikes”.
“I believe that the uncertainty related to the new variant of the coronavirus is a good time for the Council to regain the initiative and significantly influence the investors’ moods even with a smaller move than in November. The next hike will, however, be a signal of determination to fight inflation, but also the weak zloty, which ( as the statements show) is bothering the NBP again, “said the representative of TMS Brokers.
The benchmark interest rate – following two increases in October and November – rose by a total of 115 basis points to 1.25 percent. The next MPC decision-making meeting is scheduled for Wednesday, 8 December.
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