The zloty gained for a second day, erasing earlier declines, as the reopening of banks in Cyprus eased concern that debt crisis would worsen in the euro area, the consumer of more than half of Poland’s exports.
Yields on Polish government bonds rose for a third day after the Finance Ministry sold more bonds than it planned at an auction amid investor concern over how the euro area will cope with problems caused by Cyprus.
Poland sold a record amount of domestic bonds at an auction today and borrowing costs dropped to all-time lows as investors bet that the central bank will keep cutting interest rates to bolster the economy.
Poland met 88 percent of this year’s 193.5 billion zloty of borrowing needs at the end of September, Piotr Marczak, the head of Finance Ministry’s debt department, wrote in a e-mailed response to questions from Bloomberg News.
Poland has financed all of its borrowing needs for this year after selling $2 billion in dollar-denominated bonds yesterday and an inflow of 440 million euros ($622 million) in credit from the European Investment Bank today, said Piotr Marczak, head of the ministry’s debt management department, in an e-mailed statement.
Poland is prepared to “flexibly’ adjust its debt sales to market conditions for a “long time” and is in a “relatively good situation” even with the Greek crisis, Piotr Marczak , the head of the Finance Ministry’s public debt department, was quoted as saying by Parkiet newspaper.