Monetary Policy Council says there is no reason for zloty to fall any lower

After its special meeting devoted to the issue of the falling zloty exchange rate, the Monetary Policy Council (RPP) published a statement saying the current zloty value reflects the condition of the Polish economy and there is no reason for the zloty to keep losing value. Yesterday's market events seemed to confirm this view, as the zloty slightly appreciated against the U.S. dollar to less than zl. 4.5. On Friday the zloty dropped to as low as zl. 4.73 to the dollar. The RPP pointed to the large current account deficit and the drop of the euro against the dollar as causes for the zloty's recent drop. According to the RPP after the freeing of the zloty investors could perceive the Polish currency to be linked closer to the embattled euro than the dollar, because of the Polish economy's ties to the euro-zone. (Parkiet, page 1) T.J.