Polish Finance Minister Tadeusz Koscinski thinks that there is plenty of room for the Polish currency zloty to appreciate.
“The zloty is currently relatively weak, so I see room for appreciation,” he stated, adding that if the currency increases in value, it will go a long way to cushion the country’s inflation rate.
Domestic concerns and global factors such as the Covid-19 pandemic have affected the value of zloty. The currency has fallen by 1.5% since the beginning of the year.
However, the prime minister believes that the current indices provide an avenue for the currency to appreciate.
Economic Policies Also Created Issues For Zloty
The economic policies of the Polish government have not helped matters. Earlier this year, Poland increased interest rates higher than that of central European peers like Hungary and the Czech Republic. This created a vacuum, leading to a further weakening of the Polish currency.
But Koscinski argued that the government’s policy was the right action at the time. He stated that the Monetary Policy Council (MPC) reacted to the situation when domestic factors appeared. Koscinski explained that the decision has no influence or impact on external factors.
Kosinski Believes Zloty Has More Space To Appreciate
He added that a discrepancy over the judicial reforms led to the deliberate exclusion of the funds for the COVID-19 National Recovery Plan on the 2022 budget. Once the fund is included, it will come in handy for a series of investments to boost the economy. Koscinslki is expecting the average annual inflation to rise by 5.8 percent in 2022.
As a result of the exclusion, there will be little or no impact on the public finances as long as the fund is not included in the budget.
The finance minister also noted that it expects a lower deficit in 2021 compared to the figure initially planned. The economy may have experienced a slight slump in performance due to the impact of the Covid-19, but it is expected to pick up sharply. He added that $40 billion was initially set as a zloty deposit, but it’s going to be a lot less, which is slightly above $20 billion.