Interest rate hike helps zloty reach recent record highs against dollar and euro

The zloty has strengthened its position on the currency market due to the interest rate hike to combat rising inflation. Foreign investors have been eagerly investing in the zloty over the last few weeks, attracted by the quietening of the country's political turmoil. The zloty is now at its strongest level against the dollar for five years and its strongest against the euro for nine months. The zloty started to strengthen in the beginning of May, when one euro cost about zł.4.80 and one dollar about zł.4. Yesterday afternoon these levels had changed to about zł.4.46 to the dollar and zł.3.62 to the euro. However, economists warn that this favorable situation is not likely to last long, as in a few weeks the debate over next year's projected budget and public finances will again resume. The Finance Ministry predicts that inflation in June will be between 4-4.5%, compared to 3.4% in May. During the next few months the rate of inflation will probably rise to above 5%. (Rzeczpospolita, pp. A1, B1) D.W.