Poland Buys Zloty, Hungary Vows Rate Hikes as War Hits Markets
(Bloomberg) -- The Polish central bank stepped in to prop up the zloty after worries over an escalation of Russian military aggression against Ukraine sent the currency to its weakest level against the euro since 2009.
The central bank in Warsaw said on Tuesday it sold foreign currencies on the market for the zloty, without revealing the size of its operations. That's its first officially announced attempt to support the currency since 2013.
Hungary's central bank will use all tools to ensure financial stability and policy makers will continue their monetary-tightening cycle in a “predictable” and “flexible” manner, Deputy Governor Barnabas Virag said in an Inforadio interview late Tuesday after the forint plunged to a record against the euro. Rate hikes are the “most important tool” and the “first line of defense” to shield the currency, he said.
Earlier in the day, the zloty tumbled as much as 2.3% and broke past 4.80 per euro. The forint dropped close to 380 per euro before paring declines after the central bank's verbal intervention earlier in the day. Other currencies in the European Union's east also weakened. The zloty was trading 1% weaker at 4.75 per euro at 6:57 p.m while the forint was down 1.6% to 377.37 per euro.
Poland's central bank said it “has an adequate level of foreign exchange reserves and has at its disposal an appropriate set of instruments to counteract negative trends in the financial and currency markets.” Poland had $161 billion in official reserve assets at the end of January, according to the latest central bank data.
A small share of goods that Poland sells to Russia and Ukraine as part of its trade “is a factor that will limit the negative impact of this situation on the Polish economy,” according to the statement.
Before the war in Ukraine erupted, the authority had ramped up its rhetoric that it's seeking a stronger zloty to curb runaway inflation and has long argued that currency interventions are part of its available toolkit.
©2022 Bloomberg L.P.
-
Signature Play: The Classic Cocktail Is Dead. Or Is It?
Classic cocktails are disappearing from India's cocktail menus. But they're still being ordered, taught to bartenders and borrowed from. So, who's really having the last drink?
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
