NEWS / Fiscal Policy, Budget

Currency report: Clear gains on low inflation

The z?oty inched higher, helped by improved sentiment in the region and signals that early elections could be averted. On Thursday, the Sejm was set to vote on a motion submitted by the opposition to hold early polls, but instead it agreed to Law and Justice's proposal to suspend the session until Oct. 17. The EUR/PLN cross fell to 3.88 on Friday from 3.91 on Monday, while the USD/PLN cross fell from 3.1050 to 3.0850.

Statistical office data showed inflation stood unchanged at 1.6 percent year-on-year last month after two sharp rises since June. It was just below the 1.7 percent forecast and bolstered the case for the central bank to hold off on a rise in interest rates.

Central-bank policy-council member Jan Czekaj said the data confirmed the absence of general price pressure in the economy and Miros?aw Pietrewicz said inflation was unlikely to top the central bank's 2.5 percent target next year, delaying any change in rate policy beyond the first half of 2007.

Last week the dollar strenghtened against the euro and tested the key support level at 1.25 on Friday.

Marek W?grzanowski

X-Trade Brokers Dom Maklerski SA