Bloomberg News

Gilowska Says Poland Should Expect Attack on Zloty at Year End

October 12, 2011

Oct. 12 (Bloomberg) -- Polish policy makers should expect a possible “attack on the zloty” at the end of the year as markets test the government’s resolve to keep the public debt below the European Union limit of 60 percent of gross domestic product, rate setter Zyta Gilowska said yesterday in an interview in Warsaw.

Every 10 percentage-point depreciation of the zloty would increase Poland’s debt ratio, now at 57 percent of GDP according to EU accounting rules, by 2 percentage points of GDP, Gilowska said.

“This is an extremely risky situation,” she said. “We have to assume that markets could stage an attack on the zloty, because they know very well that the government will defend the currency at a level that will prevent a breach of the 60 percent limit.”

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