Strong zloty is worse than bird flu

MAG
20-08-2008, 15:54

Warsaw (Puls Biznesu) – Exporters warn that strong zloty will kill them. The government won’t do anything radical, however.

The National Economic Chamber KIG warns that strong zloty threatens the economy.

“The currency has depreciated substantially in recent weeks but it is still very strong. This is a problem not only to exporters who have not been competitive due to the changes of the exchange rates in recent weeks, but also to many companies realizing investments subsidized from EU funds. Cheap Euro lowers the amount of the subsidies”, Andrzej Arendarski, KIG CEO explained.

Exporters ask the government to do something about strong zloty.

“We have survived Balcerowicz reforms in 1990, and we have survived bird flue but we cannot cope with such an unfavorable exchange rate”, Kazimierz Pazgan, Grupa Konspol CEO said.

The government has a different opinion, however. Adam Szejnfeld, deputy Minister of Economy, believes that intervention is not necessary.

“I would not say ‘no’ to intervention in some cases. But we must look at the whole economy and we mustn’t make decisions basing on experiences of some companies only. Despite strong currency, Polish exports keep growing”, Adam Szejnfeld believed.

Economists don’t perceive any threat, either.

“Zloty appreciation came in the right moment – when inflationary pressure appeared. Otherwise, we could have interest rates at the level of 7 percent, and not 6 percent as we have today”, Marcin Piatkowski, PKO BP economist believed.

Marcin Mroz, Fortis Bank chief economist, adds that you cannot do much about the exchange rate.

“It is the market which influences the value of the currency. Interventions would depreciate zloty for a short time only but it would be expensive”, the economist said.

© ℗
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Podpis: MAG

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