WARSAW. INTERFAX CENTRAL EUROPE - The Polish government will sell euros coming in the form of European Union funds through the foreign exchange market if EUR/PLN exchange rate nears PLN 5, Polish Prime Minister Donald Tusk told a press conference Tuesday.
"After consultations with the Finance Minister and experts, I want to say that the Polish government remains calm when it comes to the exchange rate volatility, but I'm not hiding the fact that the boundary of PLN 5 [versus the euro] that appears in a short perspective is perhaps the moment when we will make a decision on the process of selling the euro - a process that I mentioned several days ago," Tusk said.
"We've assumed that some euros coming in EU funds would go to beneficiaries through the market. It's very probable that we will start the process now, since we recognize that probably, as estimated by our experts, the zloty has reached the peak of depreciation. In some perspective, we should expect appreciation. We'd like to use that moment to sell the euros that are due to come in as EU funds," Tusk added.
Tusk said earlier in February that the Polish currency, the zloty, which over the past few months shed most of the earlier three-year gains and fell to record lows against the Swiss franc and Tuesday approached PLN 4.92 against the euro, near record highs, is not at risk of long-term weakness due to the prospect of more than EUR 60 bln of European Union funds that have been programmed in the current EU budget.
Tusk said at the time that not all of that money will have to go through the National Bank of Poland and some will go directly to the market.