Too Much of a Good Thing

The long-standing appreciation of the zloty may hurt Poland's burgeoning exports, the government has warned. However, the central bank, citing the country's approaching accession to the European Union, has no intention of intervening to make the zloty less expensive. The continued strengthening of the Polish currency has brought about a situation in which the exchange rates of both the dollar and the euro have dropped below zl.4. However, the National Bank of Poland (NBP) insists that it has no intention of moving in to reduce the price of the zloty. "The central bank will work in keeping with its strategy, which means it will only intervene in the foreign exchange market in the event of a threat to the inflationary target," said Wiesława Ziółkowska, a member of the Monetary Policy Council (RPP). Prime Minister Leszek Miller recently said the zloty was overvalued and thus hurt exports. However, in the next breath, he added that "Whatever the NBP does in this matter is its own business."