– The condition of the economy does not have to spoil that rating was lowered. Just at the same time worsening the situation of public finances, increasing the risk of increasing debt in relation to GDP, and also see major changes on the political scene – he said in an interview with Dorota money.pl Strauch, an economist with Raiffeisen Polbank. In her opinion, on Friday, Moody’s likely to lower the assessment of Polish. How does this translate into gold?
Luke stick, money.pl: Finance Minister Paul Szałamacha asked the President of the Constitutional Court that the limited public appearances until Friday’s decision agency Moody’s on the Polish rating.
Dorothy Strauch, an economist with Raiffeisen Polbank: So, we start a thread policy?
Because I think to a large extent in this way we should look at the decisions of rating agencies?
certainly they arouse great emotions political. In the case you mentioned, once it has been suggested that the Ministry of Finance fears Moody’s decision, but it was just speculation. The evaluation criteria are quite accurate.
Besides, when it comes to political issues, that Poland is no exception. Please take a look at the current political turmoil in Spain and earlier in Hungary. Political changes always generate a risk rating changes.
Exactly. That maybe it’s time that investors have become accustomed to this distance and took them to the decision of credit rating agencies?
I think it is. Friday Moody’s decision, regardless of its shape, certainly will not have such a negative impact on the Polish market, such as the January ad agency S & amp; P. Then the decision of S & amp; P turned out to be a total surprise.
Now, I do not foresee such a scenario, even though short-term swing zloty may be clear. The decision will be announced in the evening. This means that investors in the market will not be much, and so it will be “shallow”. This implies the possibility of bolder moves in gold. I do not expect, however, we saw an increase in par zloty in a very large scale, for example, 10 cents.
Why the decision a credit rating agency is so important that foreign investors may rush into selling off Polish stocks, currencies or bonds?
For evaluation of a credit rating agency can be regarded as a fairly objective indicator of changes in the country. Analysts take into account not only the economic situation of the state, but also its political and fiscal situation.
This means that the condition of the economy does not have to spoil that rating was lowered. Just at the same time worsening the situation of public finances, increasing the risk of increasing debt in relation to GDP, and also seen major changes in the political scene.
So the program 500+ Family can ruin rating Polish?
this is a simplification, but drawing attention to the fact that expenditure is rising Polish and so worsening the condition of the budget. Already, economists from the European Commission forecast that the deficit reaches 3 percent of GDP in 2017.
Meanwhile, the flagship program of 500+ Family will have to finance the amount of the order of 20 billion dollars per year. The government has to come from somewhere to take measures, and not only in the 2016-2017 year, but also in subsequent years.
In January, S & amp; P argued reduction rating of Polish political considerations, m.in . dispute over the Constitutional Court.
I expect that in the case of Moody’s argument may be similar. But in addition, analysts may point out that the last months confirmed their belief that in Poland there has been a marked change in the direction of fiscal policy – the desire to further reduce the deficit to GDP to plan the maintenance of a stable level below 3 per cent, at the same time can be quite a challenge, especially in the event of deterioration in the condition of the economy.
I understand that he expects Ms. downgrading Polish?
We assume that on Friday will cut rating one level with a simultaneous reduction of the so-called. prospects from stable to negative.
This forecast differs from most of the assumptions talking about the fact that the credit rating declines will not.
But the advantage of supporters of the latter scenario is not is large.
If there is a reduction of the rating, how to translate it to our pockets?
as mentioned, the surprise will not, so you should not expect a rapid weakening of the zloty, which is still weak. I think that we can talk more about the consolidation of the weakness of the Polish currency at least for the holiday period.
This will happen because even in July to assess the credibility Polish has given Fitch. This may mean that gold will be weaker all the time, Polish stock market will fall relatively worse than developed markets and floors in the region and bond yields will remain high.
In view of the currency zloty may weaken most?
Are you sure against the euro and Swiss franc. In the case of the euro is a real limit the amount of 4.50 zloty per euro. In the worst-case scenario for the franc you will have to pay as much as in January – 4.12 zloty.
The situation is different with the dollar, which will be heavily dependent on the US central bank decisions on interest rates. And this will be made in June. If you would be so that the assessment agency Moody’s will be poor and the Fed will raise interest rates, the dollar can cost even more than 4 zł.
This scenario could have an impact on future decisions of the Monetary Policy Council in Poland ?
I think that at most will establish the Council for this to continue stable and predictable policy, consisting in maintaining interest rates unchanged and the introduction of an additional source of nervousness and volatility in the markets.
No comments:
Post a Comment