Unshackled zloty volatile as it struggles to find its place in the free market

After the government and the Monetary Policy Council (RPP) decided to fully float the zloty on Tuesday, the zloty market rate was very volatile yesterday. On Tuesday night the zloty appreciated strongly to 7.3% above what used to be the parity rate, but after domestic investors entered the market, the currency became weaker and eventually dropped to 4.15% above parity. According to Bank Przemyslowo-Handlowy (BPH) dealer Marek Zuber, the price of the zloty will remain volatile in the coming days, as investors are having trouble establishing what the value should be. The National Bank of Poland (NBP) says the greater exchange rate risk accompanying the float will help stabilize the currency. By removing any hint of an exchange rate target, the central bank says it will be free to focus on the fight against inflation. (Gazeta Wyborcza, page 24, Parkiet, page 1, Reuters) T.J.