The Polish zloty neared an all time low against the euro today over fears of souring currency options at Polish firms and rising concern about Eastern Europe's reliance on foreign debt.
Moody's rating agency said the accelerating recession in Eastern Europe will be more severe than elsewhere due to large imbalances, and it could threaten the ratings of local banks and their western parents. Banks from Austria, Italy, France, Belgium, Germany and Sweden account for 84 percent of all bank loans in Central and Eastern Europe.
Sentiment on the zloty has also been undermined by a Polish central bank report casting doubt on Warsaw's plans to adopt the euro in 2012 – since the report was published on Friday the zloty has fallen more than 8% to 4.9307 per euro, near the all-time low of 4.9453 reached in March 2004.
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