Bloomberg News

Polish State Bank Said to Sell Euro, Dollars; Zloty Jumps

September 29, 2011

(Updates with currency in second paragraph.)

Sept. 29 (Bloomberg) -- Poland’s state-owned Bank Gospodarstwa Krajowego sold euros and dollars on the market, helping pare the zloty’s steepest quarterly loss in 2 1/2 years.

The zloty jumped as much as 1.1 percent to 4.3943 against Europe’s common currency and traded at 4.4166 against the euro as of 5:44 p.m. in Warsaw. Before the bank stepped in the zloty traded around 4.44 against the European common currency. Three traders said they bought euros and dollars from the state-owned bank, which sometimes acts on the Finance Ministry’s behalf. They declined to be named because the information isn’t public.

Poland’s central bank sold foreign currencies on the market on Sept. 23, stepping in to bolster the zloty for the first time in at least a decade. BGK separately sold euro and dollars to bank and bought government bonds the same day, said two traders involved in the transactions.

Joint action by the central bank and BGK sent an “important signal” to investors and has stopped speculation against the zloty, Finance Minister Jacek Rostowski said in an interview on Radio RMF FM on Sept. 27.

The zloty depreciated to its weakest level against the euro in almost 27 months last week. It has been the world’s worst performing currency with a 9.9 percent decline against the euro this quarter, according to data compiled by Bloomberg.

--Editors: Wojciech Moskwa, Linda Shen

To contact the reporter on this story: Piotr Skolimowski in Warsaw at pskolimowski@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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