Bloomberg News

Zloty Drops Most in 2 Months as BGK Not ‘Hyperactive’ on Market

December 30, 2011

Dec. 29 (Bloomberg) -- The zloty slid the most against the euro in almost two months after state-run Bank Gospodarstwa Krajowego said it hasn’t increased foreign-currency sales on the market.

The zloty lost as much as 1.4 percent to 4.4616 per euro, the biggest intraday decline since Nov. 1, and traded 1 percent weaker as of 4 p.m. in Warsaw.

The Polish currency has rallied from the 2-1/2 year low reached on Dec. 14 on speculation BGK will sell euros and dollars on the market on behalf of the government before the end of the year to reduce the value of government debt in foreign currencies. Public borrowing rose to 52.8 percent of gross domestic product in 2010. An increase above 55 percent will trigger compulsory spending cuts and tax increases under public- finance laws.

“Right now isn’t a time when we’ve been hyperactive,” BGK Chief Executive Officer Dariusz Daniluk told reporters in Warsaw today. The zloty’s exchange rate is “under control,” he said.

--Editors: Linda Shen, Susan Lerner

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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