Poland's record high bond yields due to pressure

Poland's record high bond yields due to pressure

Poland's record high bond yields are a result of pressure from financial markets, according to Mateusz Morawiecki, the Polish prime minister.

Poland's bond yield crossed the 9 - percent mark on Friday, a level that was last seen more than 20 years ago, prompting the state-owned development bank BGK to forgo a planned bond auction as it expected to sell its bonds at lower rates.

The Polish prime minister said in the northern city of Gdansk on Saturday that a number of countries had found themselves under increased pressure from financial markets due to a rate-increase cycle by the US Federal Reserve and the European Central Bank.

The emerging economies and those aspiring to be included among developed markets, such as Poland, had seen their currencies weaken, according to Morawiecki.

According to Morawiecki, Poland has a significant current account deficit, which is seen by financial markets as a risk factor, but he expressed hope that the arrangements made at an EU summit would help Poland decrease its current account deficit by implementing a new mechanism of gas price calculation.

The opposition has accused the government of acting against the Polish central bank's efforts to fight inflation, which reached 17.2 percent in September. Critics say that while the central bank is raising interest rates, the government is flooding the market with a wide range of social programmes and subsidies that have caused inflation to go up.