7/14/2008

UPDATE 1-Strong zloty may avert Polish rate hikes-minister

WARSAW, July 11 (Reuters) - Poland's strengthening zloty could help prevent the central bank from further raising interest rates, the economy minister said on Friday.

'In my opinion the (bank's) Monetary Policy Council can hold off with further rate increases with the current zloty level,' said Waldemar Pawlak, who is also deputy prime minister.

'Rising prices are caused by foreign factors and not the Polish market,' he told reporters.

On Wednesday, Prime Minister Donald Tusk said the record high zloty was mainly positive for the Polish economy because it helped offset soaring global oil and food prices.

Pawlak, who leads the junior coalition partner Peasant Party, has said in the past he is worried about the vibrant Polish currency as it is hurting the bottom line of exporters.

The zloty rose to a new high of 3.2630 against the euro earlier this week, up 10 percent this year and more than 30 percent since Poland joined the European Union in 2004.

Source:By Adrian Krajewski, Chris Borowski, Victoria Main, forbes.com



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