Goldman Sachs Group Inc reduced its targets for the currency, saying the central bank’s cut last week will likely lead to a zloty-negative “prolonged inflation overshoot.” JPMorgan Chase & Co., on the other hand, said it wouldn’t make bearish bets given Poland’s sound economic fundamentals, and would look for opportunities to go long.
Wednesday’s 75 basis-point rate cut, three times larger than expected, sparked the selloff as it raised questions about the central bank’s determination to curb inflation. Some analysts also saw it as a politically motivated maneuver coming just before a tightly contested general election on Oct. 15, with the main opposition party saying it’ll convene a special tribunal to try Governor Adam Glapinski if it wins power.
Rafal Benecki, chief economist at ING Bank Slaski SA, said the ruling party’s latest election-campaign promise to lower the age at which Poles can tap state pensions adds to the fiscal and inflation headwinds facing the bond market.
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