WARSAW: Speculation has driven down the value of the Polish currency the zloty to a near record low this week, Poland's prime minister said Friday, but nixed government intervention to prop it up.
"Speculation on the Polish currency over the last few days is an indisputable fact," Tusk said, quoted by Polish media in Uraz, northwestern Poland, on the campaign trail ahead of an October 9 general election which opinion polls suggest his governing liberals will win.
"What's of paramount importance, is for this storm to not destabilise our financial situation. I believe we're well prepared and constant interventions on the financial markets are out of the question," he said.
Despite Poland's sound fundamentals, this week the value of the free-floating Polish currency, the zloty, tumbled to a near-record low against the euro and dollar amid worries about the impact eurozone debt turmoil may have on its main trade partner Germany.
On Friday afternoon a euro was worth 4.49 zloty, while a dollar sold for 3.32 zloty.
"Poland as a state should not undertake any speculative game on an excessively large scale, because this is always very risky," Tusk added, cooling moves toward intervention.
"We will therefore be using the same tools -- ones of common sense and moderation -- to build up our reserves, in case something were to really fall over," he added.
"We're watching the scale of the (market) events and what is most unnerving is that the sources of this turmoil are all outside Poland," Tusk observed.
"We're being hit hard by the ricochets," he added, at once insisting the market "turmoil this week is directly linked to the decisions -- or perhaps the lack of decisions -- and the words of Fed (US Federal Reserve) and IMF representatives," Tusk said.
With a healthy debt to GDP ratio by EU standards, Warsaw expects output to expand by up to 4.0 percent this year, facilitating a planned reduction of the deficit to below the Maastricht Treaty mandated 3.0 percent of the gross domestic product for eurozone entry.
Experts however warned Friday that year-end unemployment could hit 12 percent.
Copyright AFP (Agence France-Presse), 2011
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