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Zloty Drops as Central Bank Cuts Rates More than Expected

March 6, 2013 at 22:21 by Vladimir Vyun

Polish zloty notesThe Polish zloty dropped today as the Polish central bank cut interest rate more than was expected, reducing attractiveness of the currency. Yet not all specialists were bearish on the zloty.

The National Bank of Poland cut its benchmark interest rate by 50 basis points to 3.25 percent. The bank voiced concern about “a marked economic slowdown” in the fourth quarter of 2012 and said:

Economic activity may gradually improve in the coming quarters. However, GDP growth will probably remain moderate, which will continue to contain inflationary pressure.

That was the fifth straight interest rate cut, but the first by more than 25 basis points. Some analysts believed that the NBP has no more room for reduction of borrowing costs and expressed opinion that traders should be bullish on the zloty.

USD/PLN jumped from 3.1590 to 3.1970 as of 22:18 GMT today.

If you have any questions, comments or opinions regarding the Polish Zloty, feel free to post them using the commentary form below.

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