Wednesday, March 25, 2009

Foreign investors flee Poland

Foreign investors are leaving Poland: in 2008, the bond market lost 20 billion zloty (over 5 billion euro) – a record sum.

Foreign investors, including investment banks, insurance firms, and investment funds, started to sell their bonds last October, as a reaction to the financial crisis breaking out in the United States.

“Foreign investors began to doubt in the stability of countries in this part of Europe,” claims Andrzej Bratkowski, former deputy head of the National Bank of Poland.

In October alone, Poland’s bond market lost 7 billion zloty (almost 2 billion euro) worth of foreign capital. The end of 2008 saw losses in foreign capital to the tune of 19.2 billion zloty.

Bratkowski added that these losses also greatly affect the stability of the zloty and account for, in part, why the exchange rate has been so volatile since the start of the year.