Poland to guarantee stable finance, economy

AP News
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Posted: Aug 11, 2011 12:31 PM
Poland to guarantee stable finance, economy

Poland's finance minister said Thursday his government will take steps to guarantee the nation's financial credibility and economic health, the day after the stock exchange fell sharply and the zloty currency plunged in value.

But Jacek Rostowski, who cut short his vacation to meet Prime Minister Donald Tusk, did not say what those actions would be.

"We will watch the situation closely and we will be taking appropriate decisions in order to preserve the credibility that Poland has," Rostowski said.

He said steps taken to guarantee financial and economic security would be well measured and adequate to avoid overreacting to the situation.

He stressed that Poland was prepared for a crisis situation with an open credit line from the International Monetary Fund for $30 billion and with most of its borrowing needs in 2011 secured, steps that guarantee its budget.

Poland has had an open credit line from the IMF for years but has not had to draw on it.

Poland's main stock market index, the WIG 20, has fallen nearly 20 percent since July and dropped more than 5 percent Wednesday alone. However, it reversed course Thursday, rising nearly 4 percent by late afternoon.

The zloty has been falling sharply against the Swiss franc and the euro, with the process accelerating on Wednesday, but it regained some value Thursday.

It sold at 4.16 zlotys to the euro on Thursday after hitting 4.20 the night before. That was a sharp fall from 4.09 of the day before. It remains weaker than in July, when it was around 4 zlotys to the euro.

Rostowski also said that world markets _ though still very nervous _ were showing signs of stabilizing after interventions from central banks in the European Union and in the U.S.