Poland's treasury has completed nearly 40% of its 2016 borrowing plan

Controversial policies being rolled out by Poland's new PiS government are causing various headwinds for Polish assets this year. But Finance Ministry's guidance yesterday regarding 2016 borrowing plan is definitely zloty-supportive.

Poland's budget financing has been a trend in recent years, and this year is proving no different. The Finance Ministry gave guidance yesterday, announcing its plans to complete 50% of borrowing by the end of Q1. The treasury has completed nearly 40% of its 2016 borrowing plan already (bulk of it pre-financed in 2015). 

Such early borrowing minimizes the risk of any funding crunch, which could arise due to adverse market conditions later in the year. Hence, it is zloty-supportive in principle, although likely neutral in practice. The PLN is extending its steady gains against the Euro since Jan 2016. EUR/PLN currently trading at 4.3742 after hitting multi-year highs of 4.5120 in Jan 2016.