The zloty on Friday once again dropped against the euro to levels not recorded since 2001, and The National Bank of Poland confirmed that it was selling currencies again to help the Polish national currency.
On Friday around 4.30 pm the euro was paid 4.85 zlotys, the dollar cost almost 4.45 zlotys and the Swiss franc 4.84 zlotys.
Euro exchange rate the highest in 21 years
But it was worse during the day. The euro exchange rate reached levels close to PLN 4.88, i.e. the highest since 2001 and close to the record highs. The franc exchange rate exceeded PLN 4.86.
There is a large sale of Central and Eastern European currencies on the market and the outflow towards the so-called safe havens, i.e. the dollar and the Swiss franc.
On Friday, the Czech Bank intervened in defence of the Czech crown. Already on Thursday, the Bank of Hungary intervened to raise the deposit rate.
The reason is, of course, the war in Ukraine and its further escalation. On Thursday night, the Russians fired on the nuclear power plant in Zaporizhia, which made investors around the world panic.
The weakness of the zloty results from the global trend in which the franc and the dollar are clearly strengthening. Especially in the first case, the Swiss currency is at historical levels against the euro. On Friday, the market reached parity: one euro has already cost one franc.
In such conditions, the National bank of Poland intervention probably carried out in the morning brought only a temporary effect. The central bank admitted that it was selling the currencies on the market in an official announcement, without giving any details.
It was the third National Bank of Poland intervention since the outbreak of the war in Ukraine on February 24.
You can also feel it in the daily life, the limited to redraw money from ATMs per time is set down to 400 Zloty from normally 1000 Zloty. Due to the fact that many people are taking there money out to exchange them to euro, USD etc.
Warsaw Stock Exchange also in red
The increase in risk aversion was visible not only in the currency market. On Friday, there was another sale of shares listed on the Warsaw Stock Exchange. WIG-20, the index of the largest Polish companies, fell by 4.5 percent, and the Warsaw Stock Exchange Index lost 4.3 percent.
Investors mainly got rid of bank shares. The WIG Banks index fell by 7.6%, and the drop leaders were institutions with large portfolios of foreign currency for mortgages
For example, the shares of Bank Millennium depreciated as much as 10.3 percent, mBank fell by 7.6 percent. But the shares of Pekao SA, which is not involved in risky Swiss franc loans, were also sold off (the share price fell by 10.7%).
The Polish stock exchange was no exception, however, and investors in the most important European markets ended the week in a bad mood, where the most important indices lost 3.5 to 5 percent.