Government and RPP seem set to conflict over the value of the zloty

The debate over whether the zloty is too strong is still raging and could soon turn into a full row as the government and Monetary Policy Council (RPP) remain at loggerheads over the issue. The government wants the exchange rate policy to be altered, but will seek to achieve this objective through dialog with the Monetary Policy Council. Until now RPP members have been against any intervention to allow the zloty to free float, but Finance Minister Marek Belka, hopes to change that. He repeated his arguments that the overvalued zloty is hurting exports and said that next week the government would present specific proposals for changing this situation to the RPP. Meanwhile, National Bank of Poland (NBP) officials remained critical of the idea of intervening on the foreign exchange market. "If the main point of the talks [between the government and the central bank] would be to start intervention then an agreement is not likely," said deputy NBP governor Andrzej Bratkowski. However, even if the two sides do not come to an agreement the discussions themselves already seems to be having an impact on the exchange rates. (Prawo i Gospodarka, p. 1, Reuters) T.J.