The major currency of Poland, Zloty has seen a decline for the first time in last 3 days. The investors are kind of worried because of the inflation data of Poland and that has caused this decline, as predicted by many. Investors were also waiting to hear the US Federal Reserve’s final decision on the expansionary measures and that had an effect to the decrease as well.
In this week, Zloty has seen a total appreciation of 0.6%, however, today; it got declined by 0.2%. It is currently priced at 4.0942 per Euro. Incidentally, Zloty has gained the most among all of the 31 major currencies around the world in 2012. The yield on the 10-year Polish notes saw a fall of 4 basis points and is currently at 3.84%. This marks a record low value for this yield.
Maciej Reluga, who works as the Chief Economist of Bank Zachodni WBK SA, stated that the Federal Reserve’s decision of further asset purchase will definitely going to impact the future of Zloty. The inflation rate of Poland is probably going to go down to 2.9% in November. The same was 3.4% and November’s results mark the lowest figure in last 2 years. Marcin Mrowiec, who works as the Chief Economist at Bank Pekao SA, stated that a low inflation data will definitely generate further interest rate cuts. The policy makers of this European country have already cut the interest rates down twice in recent months. The reference rate is currently at 4.25%.
Incidentally, the lower house of Polish Government approved the 2013 budget of the country. This budget predicts a deficit worth $11.3 billion. It is expected that the Government will have revenues of 299.4 billion Zloty, whereas, spending of around 335 billion Zloty will also occur. The bill will now be presented to the upper house Senate. After Senate passes the same, Polish President Bronislaw Komorowski needs to sign it and convert the same into a low.
The economic growth of Poland is actually expected to be 2.2% in 2013, as par as budget forecasts are concerned. However, Government decided to reduce it further to 2% before sending the draft to the parliament. To help manage the deficit, the Government is undergoing an asset sale program in 2013 and expects to raise 5 billion Zloty out of it.