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Poland To Probe Financial Leak

April 21, 2000

WARSAW, Poland (AP) _ Acting on the request of Poland’s central bank, prosecutors launched an investigation Friday into a report that a decision to raise key interest rates in February was leaked to some investors.

Julita Sobczak, spokeswoman for Warsaw prosecutors, said the course of the investigation would be kept secret ``because of the nature of the information and its importance for the country.″

Bank officials said earlier this month that their decision to raise key interest rates Feb. 23 had been leaked a few hours in advance and had called for an inquiry.

Despite rising inflation, most analysts had not expected the move because of a boost in key rates in November.

Poland’s largest daily newspaper, Gazeta Wyborcza, has reported that one investment bank made big deals in Polish currency just hours before the decision was announced at a news conference.

Exclusive advance knowledge of rate increases, which effectively raise the cost of borrowing throughout the economy, could allow currency traders to reap big profits at the expense of others who don’t expect rate changes.