Interest rates hike provokes resurgent złoty

On Monday afternoon the value of złoty further increased and was traded at a level below the barrier of zł.4.5 to the Euro. Meanwhile in February the exchange rate was close to exceeding zł.5. The złoty is becoming more expensive as investors receive higher interest for state bonds. "The strengthening of złoty has been a result of expectations of further significant increase in interest rates by the Monetary Policy Council (RPP). It was also helped by an announcement made by Halina Wasilewska-Trenkner, a member of RPP, about higher inflation by the year's end," said Tomasz Zdyb, an analyst at Pekao SA. However, economists emphasize that breaking the zł.4.5 barrier might not be a permanent one. (Puls Biznesu, p. 9) A.K.