Speculative capital already flows in anticipation of RPP interest rate hike

The recent appreciation of the zloty could have been partly the result of an influx of foreign capital to Poland in anticipation of an interest rate increase. High inflation figures for July caused fears that the Monetary Policy Council (RPP) would raise interest rates. RPP members openly hinted this is a possibility. The recent strengthening of the zloty was primarily due to the inflow of Telekomunikacja Polska S.A. (TPSA) privatization proceeds. However, Maciej Krzak, chief economist for Bank Handlowy, says speculative capital could also be a cause. If interest rates did increase, the zloty would likely appreciate. On the other hand, Maciej Grabowski from the Market Economy Research Institute (IBnGR) says there are no economic arguments for raising interest rates. (Parkiet, page 6)