Zloty hits four-year high against dollar

The zloty hit a four-year high against the dollar yesterday, boosted by a quarter-point rate cut and improved investor sentiment toward Eastern European currencies, dealers said. But the debt market inched down on mild profit-taking, with players awaiting information on the size of a primary tender of two-year bonds, to be held on February 5. The rate cut, which was in line with expectations, helped the zloty firm 0.5% to the euro and recover from last week's losses linked to turmoil on Hungarian markets and bearish comments by the Finance Ministry. President of the National Bank of Poland (NBP) Leszek Balcerowicz, yesterday supported government plans to buy forex on the market to service hard currency debts but said the step should be properly flagged. "From the market's point of view, it would be appropriate if they (the purchases) were predictable," said Balcerowicz. The zloty sold off last week on rumors that the Finance Ministry, which favors a weaker currency to help exporters, may have begun such operations. Previously, the government conducted such deals via the NBP. (Reuters) A.Z./M.M.