Logo Polskiego Radia

Belka assuages Grexit fears

PR dla Zagranicy
Jo Harper 23.06.2015 13:44
The National Bank of Poland (NBP) will do what it takes to avoid any fallout from a possible Grexit.
Central bank president, Marek Belka. Photo: PAPCentral bank president, Marek Belka. Photo: PAP

NBP chief Marek Belka said on Tuesday that the central bank had “unprecedented reserves at its disposal” if the monetary authorities need to intervene on capital and currency markets in the event of Greece exiting the eurozone.

Belka told reporters that the biggest problem with the Greek crisis was that the potential effects are not knowable in advance.

There would likely be some turbulence on financial markets, which could impact on Poland’s debt servicing costs, Belka said.

“But, first of all, the finance minister has never been in such a comfortable situation as today. PLN 60 billion liquidity reserves both in złoty and foreign currencies means that a bond issue would not be needed for several months,” Belka continued.

"Secondly, the zloty is in some flux, but is stable,” Belka went on. “If the need arises we could intervene.”

The Polish economy is secured against all eventual unfavourable consequences of Greece leaving the Eurozone, the NBP head continued. “Our economy is very well balanced and this may paradoxically mean inflows of capital and a strengthening of the zloty."

On Monday evening the European Commission hinted it would announce a new EUR 35 billion stimulus programme to help Greece if Athens falls into line on austerity measures. “I want ordinary Greeks to know we are offering EUR 35 billion to help the economy” Jean-Claude Juncker told reporters.

A UBS report published this week suggests that a “messy” Greek exit could wipe up to a fifth off the dollar value of Central and Eastern European currencies and hit investor sentiment. “The strongest impact [. . .] would be in currencies like the Hungarian forint and Polish złoty, where we would expect a 5-10 percent depreciation against the euro, implying a downside of 15-20 percent against the US dollar.”

If Greece fails to pay the IMF on 30 June there will be no grace period, the fund said recently. Then, if Greece misses its 20 July payment to the ECB, Europe's central bank, a "forced default" would loom large. (jh)

Copyright © Polskie Radio S.A About Us Contact Us