Polish zloty weakens, fueling speculation of central bank intervention
- The central bank has frequently indicated in press statements that it was concerned about the zloty's strength.
- On the international, global markets, nothing is happening, so it is 99% sure it is a central bank intervention.
WARSAW: The Polish zloty fell sharply in early afternoon trade on Tuesday, raising speculation the central bank could be intervening in the currency market for a second time this month.
The central bank has frequently indicated in press statements that it was concerned about the zloty's strength, which it thinks could hamper the pace of economic recovery from the COVID-19 pandemic. On Dec. 18, a source close to the bank said it intervened to weaken the zloty.
"On the international, global markets, nothing is happening, so it is 99% sure it is a central bank intervention," said Damian Rosinski, chief economist at DM AFS.
Piotr Bartkiewicz, an economist at Pekao, also said the cause of the move was probably an intervention.
A spokesman for the Polish central bank declined to comment. A Warsaw-based currency trader said he was unable to confirm the speculation.
At 1327 GMT, the zloty was 0.80% weaker against the euro at 4.528, after having softened as much as 1.5% earlier in the day.
The Czech crown was 0.13% softer at 26.296 and the Hungarian forint was 0.19% weaker at 364.60.
Hungary's central bank provided 765 million euros ($937.20 million) worth of liquidity to commercial banks at Tuesday's euro/forint swap tender, accepting all bids, the bank said.
Stocks rose, as a US stimulus package added to optimism in global markets surrounding the Brexit trade agreement and COVID-19 vaccination programmes.
The House of Representatives voted on Monday to more than triple stimulus payments to $2,000 from $600, sending the plan on to the Senate for a vote.
Stock markets in Prague, Warsaw and Budapest were up 0.5-0.8%.
"Global factors are decisive, the stimulus package in the United States helps to keep the good mood," said Bartosz Kulesza, an analyst at Pekao in Warsaw.
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