Zloty and forint to come under strong pressure as Russia turns off the first gas taps – Commerzbank

In line with yesterday afternoon’s news that Russian gas supplies to Poland would stop, the zloty came under strong pressure. The forint is also set to suffer, economists at Commerzbank report.

Zloty and forint likely to be the main victims

“The Eastern European currencies, above all the zloty which is at the centre of attention at present, are likely to remain under downside pressure as a result of this news.” 

“It is foreseeable that energy prices will drive up inflation rates further, thus putting pressure to act on the central banks. The Eastern European central banks have already hiked key rates. The Polish and Hungarian central bank in particular are likely to nonetheless keep an eye on the economic threats as well and might not act decisively enough for the market. As this reduces the prospect of positive real interests in Poland and Hungary these two currencies are likely to be the main victims for now.”