BUDAPEST/BUCHAREST: The zloty led a weakening of Central European currencies on Wednesday as Polish Prime Minister Beata Szydlo dismissed Pawel Szalamacha as finance minister in a government reshuffle.
His responsibilities will be taken over by Deputy Prime Minister and Economy Minister Mateusz Morawiecki who has bigger support within the ruling Law and Justice Party (PiS) which is advocating a bigger state role in various economic sectors including banks.
Szydlo said the reshuffle was needed to make the government's wide-reaching economic stimulus plan more effective.
She had warned on Friday that she would make changes to her 10-month-old government, causing uncertainty over policies and weighing on Polish asset prices. The zloty dipped by 0.3 percent against the euro by 1633 GMT.
Nomura analyst Peter Attard Montalto said the reshuffle was not as bad as expected.
"The concentration of economic policy under Deputy PM Morawiecki can only be a positive if communications and transparency with investors improve, which seems difficult," Montalto added in a note.
The Warsaw bourse's bluechip index closed 0.1 percent higher, off a 2-week low hit on Tuesday.
Poland's 10-year government bond yield rose 4 basis points to 2.86 percent. Hungary's corresponding yield also rose by 3 basis points as investors were pushing prices lower ahead of a government bond auction on Thursday.
The bid on Romania's 10-year bond yield rose 3 basis points to 2.89 percent, reversing an early decline. The country tapped an earlier issue of 2028-expiry eurobonds on Wednesday, borrowing further 1 billion euros.
Slovenian stocks briefly touched a 2-week low after parliament approved a corporate tax hike which companies said would boost their costs.
But late gains by pharmaceuticals Krka helped Ljubljana's main stock index close 1.2 percent higher. The index of the Sofia bourse, which is as illiquid as Ljubljana, jumped 3.4 percent to an 18-month high.
The kuna eased 0.2 percent to 7.5165 against the euro even though Croatia moved closer towards forming a new government as President Kolinda Grabar-Kitarovic started talks with parties.
Comments
Comments are closed for this article.