KBC Market Research Desk
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Polish markets calmer as NBP president Belka holds its position after its scandal with Interior Minister
The scandal with leaked taped conversations of President NBP Belka and Interior Minister Sienkiewicz yesterday dominated the news from the region and have responsible for increased volatility of Polish asset markets. In addition to a jump in government bond yields and a fall of Warsaw stock exchange the Polish zloty lost about 0.5% against the euro.
However the Polish markets have calmed after Prime Minister Tusk’s press conference. He said that NBP President Belka had not committed any crime (which was confirmed by the Prosecutor General) as the interview had been conducted in a hypothetical plane with the intention to help Poland and not to hurt it. Recall that on Saturday the Polish weekly “Wprost” published a leaked conversation between NBP Governor and Interior Minister Sienkiewicz from July 2013. Mr Belka said that in a crisis situation the NBP could help finance the budget deficit. In order to win central bank support, the NBP Governor demanded the firing of the then Finance Minister Rostowski (which actually happened).
Today, the NBP affair might still grab some attention as its President Belka is going to meet with his colleagues from the Monetary Policy Committee. Although Belka told yesterday that he would not to resign as governor, which is a positive message for the market, increased volatility of the zloty and Polish government bonds might prevail for some time. The bias for higher market volatility might be supported by domestic releases of wage growth and employment data for May, increased geopolitical risks (Iraq, Ukraine) and markets’ pre-positioning ahead of tomorrow’s FOMC meeting.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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