(Updates with details, background)
By Marcin Grajewski
BRUSSELS, July 8 (Reuters) - Poland's zloty currency
<EURPLN=> is likely to face strong appreciation pressure in the
pre-euro ERM-2 exchange rate system, as was the case with the
Slovak crown, the Polish finance minister said on Tuesday.
Jacek Rostowski told a news conference such pressure might
require costly forex market interventions by the central bank,
so the government would analyse preventative options.
"Slovakia ... is joining the euro zone after a significant
currency appreciation so we can suspect that a well-prepared
country like Poland may be subject to strong speculation towards
appreciation on the currency market," he said.
"This may create problems, so we will analyse this case
(Slovakia), ponder what is the best way to prevent this."
Rostowski was speaking after Slovakia cleared the final
hurdle towards joining the euro zone on Jan. 1, 2009. EU finance
ministers set the rate at which the single currency will replace
its crown <EURSKK=> -- at 30.1260 crowns to the euro.
Many analysts believe Poland could join the ERM-2, the
currency stability test for joining the euro, in 2009 at the
earliest and adopt the currency in 2012.
The Slovak crown has gained some 22 percent against the euro
since July 2006, when the current left-wing government took
over. Slovakia has twice revalued the central parity rate in the
ERM-2, around which the currency of a euro candidate is allowed
to fluctuate within a narrow band.
Poland's zloty is expected to face similar pressure in the
ERM-2, so the Polish central bank and the European Central Bank
may need to conduct costly intervention on the currency market
to keep the zloty within the required band, Rostowski said.
"What happened in Slovakia may encourage players in the
currency market to expect appreciation (in Poland), which may
mean a need for sizeable intervention to avoid this."
Under Poland's current free-float system, the zloty has
gained 8.5 percent against the euro since the start of the year
and more than 31 percent since Poland joined the EU in 2004.
The Polish currency hit a record high of 3.2990 against the
euro on Tuesday after breaking through the key psychological
level of 3.3 zlotys.
Rostowski also said the EU's go-ahead for Slovakia to join
the euro zone despite ECB doubts over the country's inflation
was a good signal for Poland's euro bid.
"There were certain temptations to sharpen (euro entry)
criteria for Slovakia ..., attempts to look for excuses not to
accept Slovakia," he said.
"The fact those temptations were rejected is a positive
result from the point of view of Poland's future membership of
the euro," he added.
The ECB had doubts over whether Slovakia met the euro entry
inflation criterion in a sustainable way, but the European
Commission, the EU's executive arm, finally decided to recommend
that the country be allowed to enter the euro zone.
(Editing by Dale Hudson)
