Polish central bank intervenes to support currency

AP News
Posted: Sep 23, 2011 11:47 AM
Polish central bank intervenes to support currency

Poland's central bank on Friday intervened to support the country's currency, the zloty, pushing it up against the euro and dollar after weeks of depreciation caused by fears of economic turmoil in Europe.

The National Bank of Poland said it used "a certain amount of foreign currency for zlotys."

It did not give the size of the exchange and provided no other details. But the move had the immediate effect of bolstering the zloty, which has weakened significantly in past weeks as fears of economic turmoil in Europe have prompted foreign investors to flee such emerging economies as Poland's.

Poland is the only European country that avoided recession in 2009, and its economy is expected to grow by 4 percent this year. Some economists say the dramatic weakening of its currency is a reflection of investors' fears more than any significant change in Poland's economic fundamentals.

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After the central bank's move, the zloty strengthened to 4.42 to the euro compared to 4.51 earlier in the day. It also rose to 3.27 to the dollar compared to 3.36 just before the intervention.