On Wednesday afternoon we observe further zloty weakening. According to economists, the performance of the Polish currency is under the pressure of a strong dollar and political conflicts. The Swiss Franc is the most expensive ever. The exchange rate on the CHF / PLN pair exceeds 4.43. Since June 2016, the most you have to pay for the British pound. Other major currencies – the euro and the US dollar – are also going more expensive.
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“The situation on the EUR / PLN indicates that the upward move will continue. The market may be willing to approach the levels of 4.68-4.69. However, it will depend on the dollar, as its behavior in the short term drives the dynamics In turn, the declines in the EUR / USD result from the growing expectations of interest rate hikes by the Fed, “Wojciech Stępień, economist at BNP Paribas Polska, told the Polish Press Agency.
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“Such movements in quotations never go in one direction, so after a few days of a strong decline in EUR / USD and an increase in EUR / PLN, a slight correction is possible, but the pullback will be rather short-lived and we will return to the current trend afterwards,” he added.
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According to Maciej Madej from Dom Maklerski TMS Brokers, the zloty is trading under the pressure of a strong dollar and political conflicts.
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“Due to an open letter from the leaders of the various factions of the European Parliament the real risk of delaying the disbursement of EU funds for the National Reconstruction Plan is growing. Adding to this the unfavorable balance of power in the core markets and the conflict on the border with Belarus, the climate around the zloty is extremely unfavorable. The increase in the number of COVID-19 cases is not without significance. Although the government declares no restrictions, the situation is developing worryingly, “Madej pointed out in Wednesday’s commentary.
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Interest rates in Poland
The representative of TMS Brokers also pointed out that “reduced confidence in the Monetary Policy Council (Monetary Policy Council – ed.) Is one of the reasons for the zloty’s failure to react to significant interest rate increases”. “Under more favorable circumstances, the zloty should clearly gain after the start of the tightening cycle” – noted Madej. In his opinion, “the whole communication of the central bank (including various announcements) does not increase the authority of the bank”.
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Interest rates in Poland were increased in October and November. The benchmark interest rate rose by a total of 115 basis points to 1.25 percent.
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The president of the National Bank of Poland and the chairman of the MPC in the reply sent to the Polish Press Agency indicated that a further increase in interest rates is now more likelybut it is difficult to predict whether this assessment will not change.
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Maciej Madej pointed out that although the National Bank of Poland appears hawkish, i.e. wants to increase interest rates, the words of the representative of the hawkish faction in the Monetary Policy Council – prof. Eugeniusz Gatnar – could have disappointed the market a bit. “Gatnar expressed his will to two consecutive interest rate hikes by 50 basis points each. Taking into account the rates on the FRA market, this could be considered as not meeting the market expectations. The fact that the MPC does not aim to satisfy the market is strongly reminded by the NBP president” –
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The next MPC decision-making meeting is scheduled for December 8, 2021.
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PAP / Adam Ziemienowicz
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Zloty – exchange rate November 17, 2021
On Wednesday around 18.40 you had to pay for the euro around 4.66 zlotys.
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The US dollar cost about PLN 4.12.
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The CHF / PLN pair exceeded the level of 4.43. The Swiss Franc is the most expensive ever.
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You had to pay PLN 5.55 for the British pound. The British Pound is the most expensive since June 2016.
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photo-source">Main photo source: Shutterstock
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