As Santander Bank economist Cezary Čapek said in an interview with Interia Biznes, the relative strength of the zloty in… Currency market Perhaps as a result of the support provided by the comments of the head of the National Bank of Japan on Monday, Adam GlabinskiWho said during a press conference in Warsaw that the National Bank is satisfied with the development of the zloty exchange rate. The expert also points out another factor related to the national policy policy, which may help the zloty despite the unfavorable geopolitical situation, which is the fact that there is a fixed rate. The Polish currency’s recovery after the October interest rate cut was less than expected by markets.
– The zloty weakened much earlier, after the interest rate cut by 0.75 points. percentage in September, it is now, after the Monetary Policy Board in October, introduced a smaller cut of 0.25 points. percent, investors have probably limited their play against our currency, especially since the elections are approaching, so further fluctuations in the zloty would not be desired by the National Bank or the government – says the expert.
Referring to the events in Israel, the economist admitted this The conflict would likely pose a threat to the zloty, but for this to happen, it would likely escalate. Complicating the situation throughout the region. Then, in a wave of risk aversion, investors will begin to flee towards safe-haven assets, such as the US dollar, which could lead to a weakening of the Polish zloty due to its negative correlation with the dollar. Higher oil prices will also not be beneficial for the zloty, as Poland is an importer of raw materials. – Given the high uncertainty, a strong escalation is not currently our base scenario, and international markets may already be focusing this week on US inflation data. In turn, in the country, the most important thing for the zloty may be the result of the parliamentary elections – confirms Interia’s interlocutor.
Rafael Sadukh, an analyst at the financial brokerage firm MBank, believes so Two main arguments currently support the zloty. The first is the ongoing correction in the dollar market, which favors the strengthening of emerging market currencies. The second is the one previously mentioned, which is smaller than expected Reducing the interest rate Issued by the Monetary Policy Board in October. – Let’s remember that the markets were already pricing in a 0.50 pip cut. Percentage – the expert notes.
When asked whether the zloty may start to decline in the short term due to a possible increase in risk aversion in the face of events in the Middle East, the BM mBank analyst points out that investors’ sensitivity to armed conflicts has become less after last year’s war. Geopolitical turmoil – Unfortunately, the world has become accustomed to these wars – says Rafael Sadukh – recalling that after the Russian aggression against Ukraine in 2022, the markets reacted with sharp declines, after which they recovered just as quickly.
Another economist, who spoke on condition of anonymity, when asked about possible sources of the good behavior of the zloty, noted that Investors in the currency market are currently mainly playing on election pollsWhich indicates a possible victory for the opposition.
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