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Are we standing on the precipice? This is how the extra weakness of the zloty might end

Are we standing on the precipice?  This is how the extra weakness of the zloty might end

On Thursday morning you pay 5.03 zlotys to the dollar and 5.07 zlotys to the franc. These currencies are breaking their historical records this week and the Euro is not down either.

As Walewski emphasizes, The zloty depreciates against the dollar like almost all other currenciesExcept for the franc. This is the result of an exceptionally decisive reaction of the US central bank to the problem of inflation. However, the euro is weakening, and the zloty is losing in particular, due to the assessment of the risks related to Russia’s invasion of Ukraine and the related energy crisis on our continent.

However, the chief economist of BGK, in an interview with Rzeczpospolita, admits that Not all currencies in the region lose equally. In this regard, we are between the Czech Republic and HungaryIt could be better, but it could also be worse.

Will the weak zloty drown out our economy? The solution will be a shift in government policy and NBP

The weakness of the zloty in the current macroeconomic environment is a disturbing phenomenon, because We are importers of energy resources, and if our currency continues to weaken, we may face serious problemsWhen “the negative consequences of a weak zloty begin to be stronger than the positive results.” According to the expert, we are already close to the border, the crossing of which can be very dangerous for the Polish economy, which is also suggested by the comments of NBP representatives.

The rest of the article is under the video

See also: The risk of a massive recession. “Poland is pursuing a policy to weaken the zloty”

The example of Great Britain, where the announcement of tax cuts led to a strong currency devaluation, indicates that markets are sensitive to this. Walewski says in an interview with Rzeczpospolita in the World that the acceptance of loose fiscal policy is ending – or already over.

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