Central bank ready to react to excessive zloty fluctuations

Rafał Guz/PAP

Poland’s central bank, the National Bank of Poland (NBP), has said it is ready to intervene to counteract excessing fluctuations in the value of the Polish zloty.

The bank added that zloty’s depreciation in recent days is not coherent with the country's economic fundamentals or the NBP’s policies.

In a press release on Tuesday the NBP said that it has adequate currency reserves and is using the appropriate instruments to counteract negative tendencies on financial and currency markets. "The NBP is prepared at any time to react to excessive fluctuations of the zloty rate that might disturb the functioning of FX or financial market, impact financial stability or the effectiveness of the NBP's monetary policy," the press statement read.

"The National Bank of Poland is carefully analysing the situation in the economy and on the financial markets, which remain under the influence of Russia's armed aggression against Ukraine," the statement continued. "The small share of export goods from Russia and Ukraine in Polish exports is a factor that will limit the negative effects of that situation on the Polish economy."

The statement also said that growing energy prices have had a negative effect on the Polish and European economies, but that available information suggested that despite these uncertainties, Polish economic growth would remain strong.

The Polish Zloty weakened on Tuesday to PLN 4.8 to the euro, later recovering to PLN 4.73. Similar currency fluctuations have occurred in Hungary and the Czech Republic.