The Polish zloty ended the session on Friday much as it began, glued to a narrow range in the 3.93-3.94 area in thin trade ahead of the weekend. The PM Kazimierz Marcinkiewicz who tried to calm investors ahead of the vote on the dissolution of the Sejm later this week and reassured that the government would remain committed to the fast adoption of Maastricht nominal convergence criteria as early as in 2009 got relatively little attention. Marcinkiewicz vowed that the budget deficit would remain anchored at PLN 30 bn next year and assured investors that the government would not interfere with the central bank independence.
The global sentiment toward emerging markets should remain the most important factor as far as the zloty’s performance is concerned early this week, We cannot stress enough that apart from domestic politics higher US and Eurozone rate expectations still remain the most tangible threat we can see to the zloty.
(CSOB - Investment research)