Bloomberg News

Zloty Slides to Lowest in Two Weeks on European Summit Concern

October 20, 2011

Oct. 20 (Bloomberg) -- The Polish zloty slid to the lowest in more than two weeks against the euro on concern European leaders won’t agree on plans to tame the region’s debt crisis.

The zloty lost 1.6 percent to 4.4121 against the euro as of 5:28 p.m. in Warsaw, its weakest level on a closing basis since Oct. 5. It had the fourth-steepest drop among more than 20 emerging-market currencies tracked by Bloomberg today.

Herman Van Rompuy is sticking with a plan to hold an Oct. 23 summit to stem the euro-area debt crisis, an EU official told reporters in Brussels on the condition of anonymity. Newspaper Die Welt reported earlier today that the German government doesn’t rule out a delay of the leaders’ meeting as a result of divisions over leveraging the bailout fund, the European Financial Stability Facility. European Union President

“All the news surrounding Europe is getting worse as we approach the weekend,” Gaelle Blanchard, an emerging-market strategist at Societe Generale SA, said by phone from London. “The confusion about the summit has triggered a new wave of risk aversion.”

Poland, the EU’s largest eastern economy, relies on the euro area for 55 of its export sales, according to statistics office data. Economic growth in eastern Europe is slowing “substantially” as a “protracted” euro-area debt crisis infects the region, the European Bank for Reconstruction and Development said on Oct. 18. Polish expansion will slow to 2.2 percent in 2012 from this year’s 3.7 percent growth, it said.

--Editors: Stephen Kirkland, 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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