Rate cuts have hurt the złoty. The exchange rate has weakened against the main currencies

The Polish currency weakened against the main currencies on Wednesday after the announcement of the Monetary Policy Council's decision to cut interest rates; the dollar was worth around PLN 3.62, the euro PLN 4.26, and the Swiss franc PLN 4.57.

The Monetary Policy Council (MPC) on Wednesday, at the end of a two-day meeting, decided to lower interest rates by 25 basis points. The Council's decision means that the main interest rate, the reference rate, has been lowered to 5 percent on an annual basis. The Lombard rate will be 5.50 percent on an annual basis, the deposit rate 4.50 percent, the bill rediscount rate 5.05 percent, and the bill discount rate 5.10 percent on an annual basis.

On Wednesday, after the announcement of the MPC decision at around 4:20 p.m., the Polish currency weakened by 0.34 percent against the euro, which was valued at around PLN 4.26. The złoty exchange rate against the dollar, which cost PLN 3.62, weakened by 0.72 percent. In turn, against the Swiss franc, the Polish currency weakened by 0.47 percent - the franc cost PLN 4.56.

"The corrective decline in the euro/dollar rate combined with the Monetary Policy Council's rate cut weaken the złoty. Nothing serious is happening, but the attraction of the Warsaw Stock Exchange for foreign investors may decrease," Piotr Kuczyński, the chief analyst of the Xelion Investment House, assessed in a post on X. (PAP)

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