Zloty Weakens Over Election Instability in Poland
- New Europe Investor
- October 21, 2015
With the general election only a matter of days away, Poland’s zloty is showing signs of weakness amid the probability of a change of government.
Today, the currency hit 4.27 to the euro, not seen since the beginning of the 2015.
Law & Justice (PiS) are poised to replace Civic Platform (PO) who have ruled the country for eight years. All recent polls have suggested the margin between the country’s two leading parties will be at least 10%.
The perception of Law & Justice at home and abroad is that they are less business friendly with more socially minded policies. They have pledged to force banks to pay for the losses from the Swiss franc mortgage crisis. This crippled over 500,000 mortgage holders in the country following Switzerland’s removal of their currency peg earlier in the year.
The party also intends to inject a light element of Euroscepticism into Polish politics and lower the country’s retirement age back down to 65, contributing to the fear that the budget deficit may rise under their tenure.
Some analysts believe a Law & Justice victory has been priced in to the markets throughout the year, with the country’s main stock index, the WIG 20 down 9% in 2015.
Andrzej Duda managed to take the presidency for the party earlier in the year over Civic Platform’s Bromoslaw Komorowski, so one could say that momentum is on their side.
Voting in Poland takes place on Sunday 25th October.