For the following day in a row, the Polish zloty has dropped against the dollar, euro and Swiss franc as Japan’s attempt to avert nuclear disaster has prompted demand for safety.

The Swiss franc has since climbed to its almost strongest level in history, as investors are still confused as to how an explosion at Fukushima nuclear power plant will affect the Japanese and global economies.

“Nuclear psychosis still has a grip on investors and it’s a breeding ground for adjustments,” says Marek Rogalski from BOS Bank.

Investors’ hesitation has been reflected on the Polish zloty. “On Wednesday, the zloty continued to decline and now one euro is worth 4.03-4.08 zloty. The Polish zloty, along with the Hungarian forint and Czech koruna, is perceived as a risky currency so the current situation in Japan is unfavourable for its growth. It is even possible that the Polish zloty may reach the 4.10 level against euro,” says Robert Kesicki, foreign exchange dealer at Kredyt Bank.

Economists stress that there is a slim chance that the Polish Monetary Policy Council will increase interest rates after the news about inflation being lower than expected, adding to the Polish zloty’s condition on the currency market.

The Polish zloty has lost mainly against Swiss franc, which is bad news for many Poles who have mortgages in the Swiss currency. According to the average exchange rate by the National Bank of Poland on Thursday, one Swiss franc costs 3.17 zloty. (mg/jb)

Source: PAP