Market analysts warn budget reform is key to winning investor's confidence

Financial analysts believe that the złoty is losing its value despite the economic recovery and the verbal interventions of the government. Moreover, the successful sale of $1 billion T-bonds on Wednesday did not solve all the fiscal problems of the state. British banking group HSBC claims that the current decrease in the currency's value and the yield increase of the bonds prove that the market has no trust in the government. HSBC also said that it was hard to say what the government could do in order to regain trust, unless substantial changes to the next year's budget were carried. A major problem here is that the Cabinet does not want to make further amendments to the budget. On Thursday morning, at 4.673, the Euro hit a new high against the złoty, while the profitability of 5-year T-bonds increased to 6.15%. On the positive side, HSBC believes that the economy is based on a firm foundation. (Rzeczpospolita, p. A1, B1) M.K.