Lars Christensen
Danske Bank A/S
This morning, the Polish zloty is trading weaker as a result of the scandal involving central bank governor Marek Belka, which is dominating the Polish news flow. The scandal broke after the Polish magazine Wprost published an article about a leaked conversation between interior minister Sienkiewicz and central bank governor Belka. On the leaked tapes, Belka appears to be calling for the sacking of then finance minister Rostowski. The recording is from 2013 and Rostowski was later forced to resign.
There is no doubt that this story presents a problem for both the Polish government and for Belka and a number of opposition politicians are already calling for the sacking of both the interior minister Sienkiewicz and Belka.
It should also be noted that for some time, the Polish central bank (NBP) has been what we consider to be overly hawkish given the state of the Polish economy and it is hard to avoid thinking that the apparent dissatisfaction within the NBP with Rostowski has caused the NBP to be more hawkish than might otherwise have been the case.
From our perspective, there is no doubt that this could develop further in the coming days and even though we do not necessarily think it will have a long lasting impact on the Polish markets, it is likely that zloty volatility will remain heightened in the near term. Furthermore, if this eventually leads to Marek Belka being forced out as central bank governor, then, of course, the scandal could have longer lasting implications.
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