Poland's central bank chief has ruled out intervening to prop up the country's weakening currency.

The head of the central bank Slawomir Skrzypek told news channel TVP Info that "It doesn't seem necessary to take the decision on an FX intervention", and that Poland would be better off saving its €55 billion reserves to maintain the zloty's stability after the country enters ERM prior to joining the Eurozone.

The government has said it aims to adopt the euro in 2012, which means it must enter ERM this year and keep the zloty within a tight trading band relative to the common currency.

Poland's Economy Minister Waldemar Pawlak also had the same message. He told Public Radio Program I that intervention to prop up the currency would be a mistake.

The zloty yesterday fell to its lowest level against the euro since the middle of 2004.

"There's no need for intervention on the currency market, that would only encourage speculation," Pawlak, who is also a deputy prime minister, said.

The weakened currency also helped boost exports, he added.

Meanwhile the Deputy Finance Minister Katarzyna Zajdel-Kurowska told Puls Biznesu that the zloty was "substantially undervalued," and the currency's fall was due to waning confidence in all of central and eastern Europe's economies.

Robin Bowman