By Patryk Wasilewski
WARSAW--Some Polish rate setters are worried the strengthening
zloty could hurt exports and extend deflation, minutes from the
central bank's April meeting showed Thursday.
The stronger Polish currency against the euro could hurts
exporters' earnings by making their goods more expensive in the
eurozone, Poland's main foreign market, while deepening deflation
by lowering the domestic prices of imported goods.
The rate-setting panel kept borrowing costs at a record low of
1.5% earlier this month and the minutes show that changing the
level wasn't discussed.
Poland has been in deflation since July 2014 with the consumer
price index declining 1.5% annually. The country's economic
recovery has continued at a robust pace, however, with expansion
last year reaching 3.4%, and rate setters expect further
acceleration in coming quarters, the minutes showed.
The Polish zloty has strengthened nearly 8% against the euro
since the middle of January as foreign investors are lured to the
local market by higher interest rates and a robust economic
outlook.
Earlier in April, the euro bought less than 4 zlotys for the
first time since the middle of 2011 and some analysts expect the
Polish currency to strengthen more as the European central bank's
quantitative easing gathers speed.
Write to Patryk Wasilewski at patryk.wasilewski@wsj.com