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The zloty slid to the weakest in more than three weeks after a report showed Polish retail sales growth slumped the most since April 2010, piling pressure on the central to lower borrowing costs to revive economic growth.
The zloty weakened 0.6 percent to 4.1288 per euro as of 5:05 p.m. in Warsaw, the second-steepest decline among more than 20 emerging-market currencies tracked by Bloomberg after South Africa’s rand and its lowest intraday level since Sept. 28. The yield on two-year notes rose two basis points to 3.89 percent, according to data compiled by Bloomberg.
Polish retail-sales growth slowed more than economists estimated in September, boosting pressure on policy makers to aid the economy by lowering interest rates from a three-year high. Sales advanced 3.1 percent from a year earlier, the statistics office said today. That was less than the 4.5 percent median forecast of 28 economists surveyed by Bloomberg.
“The data obviously support expectations for interest-rate cuts,” Ernest Pytlarczyk and Marcin Mazurek, economists at BRE Bank SA, wrote in e-mailed comments today. “Policy makers will have to revise their quite optimistic perception of Poland’s economic situation.”
The central bank increased interest rates by a quarter point to 4.75 percent in May, making Poland the only country in the European Union to raise borrowing costs this year. Policy makers said last month they will cut rates should new data confirm a “protracted” economic slowdown and “limited” risk of price pressure.
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