Speaking at a press conference on Thursday, the central bank chief forecast a significant inflow of portfolio investment to Poland as global interest rates are adjusted.
"Anyone investing in Poland, buying Polish bonds, knows they are 100 percent safe," Glapiński told reporters. "That’s why Polish bonds are easy to sell, although their yields do fluctuate."
With interest rate cuts expected in both the United States and the eurozone, the central banker said the zloty would become more expensive, boosting the profitability of Polish bonds.
"There will soon be another rate cut in the eurozone, and if the situation remains stable, we can expect a rise in the zloty's value and a substantial inflow of portfolio capital to Poland," Glapiński predicted.
While a stronger zloty could benefit exporters, Glapiński said the balance for those who also import goods could be less positive.
He also warned that an increase in the price of the zloty could affect the central bank’s profitability.
"The rise in the exchange rate leads to what economists call 'negative profit,' or NBP losses," he said, adding that "the bank’s mandate is price stability, not profit-making."
Poland's economic outlook is closely tied to global monetary policy, as both US and European interest rates have been central to the country's financial strategy.
(jh/gs)
Source: PAP