The zloty advanced after German business confidence rose to a 10-month high and Fitch Ratings revised its outlook on Poland’s A- credit rating to positive.
Fitch’s revision from a stable outlook reflects a narrowing of the country’s budget deficit and a stabilization of public debt, the company said in a statement yesterday. German business confidence advanced more than forecast in February, adding to signs that Europe’s largest economy and Poland’s biggest trade partner, is gathering strength.
“We see scope to increase Poland’s rating sometime in the next two years,” analysts at ING Bank Slaski SA (ING) in Warsaw, led by Rafal Benecki, said in a research note today. “More stability in the euro region and further fiscal consolidation are key” for Poland to receive the upgrade, ING wrote.
The Polish currency gained less than 0.1 percent to 4.1602 against the euro, at 4:42 p.m. in Warsaw. The yield on the government’s benchmark 10-year zloty bond was unchanged at 3.99 percent, according to data compiled by Bloomberg.
Fitch’s announcement won’t be a “game changer” for Polish debt, Ernest Pytlarczyk, chief economist at BRE Bank SA in Warsaw, said in a research note today.
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