December 9, 2022

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The Polish zloty rose.  Important decision from the European Central Bank

The Polish zloty rose. Important decision from the European Central Bank

European Central Bank (European Central Bank) raised interest rates in the euro area by 0.5 percentage point. This is the first rate hike in more than 10 years. The last one was recorded in July 2011. Economists expected such a decision by the European Central Bank, but assumed lower growth. Forecasts assumed an increase of 0.25 percentage points. This translates to currency exchange rates instantly.

Immediately after the announcement of the European Central Bank’s decision, the euro strengthened against the dollar. As the Polish zloty appreciated against dollar. Before the decision, the cost was less than 4.68 PLN, and after a quarter of an hour it was less than 4.65 PLN. The Swiss franc fell from 4.81 zlotys to 4.79 zlotys, while the euro was trading at 4.76 zlotys.

The European Central Bank’s decision has an indirect impact on the Polish market.

– The European Central Bank’s rate hike, in contrast to the Fed’s rate hike, strengthens the zloty, especially against the dollar and the euro, which actually leads to a tightening of monetary conditions in Poland. An increase in interest rates by the European Central Bank has also dampened some demand in Poland. This allows limiting the size of the NBP rate increases – Piotr Bujak, Chief Economist, comments on the situation in social media PKO BP.

Source: www.ecb.europa.eu

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