A SUPPLEMENT TO EUROMONEYDevaluation and the basketLike virtually all of the currencies of the so-called transition economies, Poland started its re-entry into the world’s free market community with a massive devaluation. In order to regain competitiveness, the Polish Zloty was then pegged to a currency basket reflecting the weight of the country’s most important trading partners and foreign investors. Due to the large inflation differentials between Poland and the countries whose currencies constitute the basket, since December 1991 the Central Bank has furthermore followed a crawling peg policy of gradual monthly devaluation. |
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