WARSAW--The National Bank of Poland stands ready to prevent the zloty from weakening rapidly, the bank's governor said, although the currency is less volatile now than last year, when the bank intervened to support it.The zloty is heavily exposed to changes in sentiment amid the euro zone's crisis and tends to weaken when investors seek assets considered to be safer. The central bank intervened several times last year to support the it amid bouts of weakness; so far this year it has held fire despite the currency's slide in May, prompted by concerns that Greece could exit the euro zone in a disorderly way.The zloty has weakened about 4% against the euro since the beginning of May, shortly before parliamentary elections in Greece that proved inconclusive. Central bank officials have said the zloty remains fundamentally undervalued considering Poland's economic resilience."Of course you can't stop the market speculating about the level of tolerance" the central bank has for the zloty's weakening governor Marek Belka said in an interview this week with Dow Jones Newswires. "But yes, if we see excessive market dynamics fueled by short-term speculation, we are ready to step in. We are monitoring the market by the hour. We are not renouncing the possibility of an intervention."Polish Central Bank Watches Zloty Closely The bank doesn't have a target for the zloty, he said, but was determined to limit excessive volatility, which has been less pronounced recently, possibly because of the bank's readiness to intervene and improved market sentiment on account of Warsaw's fiscal tightening."Maybe the market has factored in this potential presence of the NBP. But maybe also the perception of fundamentals of the Polish economy improved... It was demonstrated that the deficit is much better than expected and the external position is improving," he said.Both the current account deficit and the foreign trade deficit narrowed in March, and by a greater margin than analysts had expected.Warsaw aims to trim the public deficit to a touch below 3% of economic output this year from 5.1% in 2011, something that Belka says he believes is attainable."I'm pretty confident the finance ministry is on the right track to trim the deficit to 2.9%," Belka said. "The deficit could even be below 2.9%," but that would depend on whether the economy keeps slowing or rebounds in the second half of the year. "I know the ministry is determined to put a lid on expenditure if necessary. So far, tax revenue has been flowing in decently, but you can't have extremely positive numbers if the economy is slowing."Furthermore, barring a marked economic slowdown in Poland this year, the government is in a position to post an even narrower deficit, he said."Fundamentals look better--are better indeed--and the potential for currency instability is slightly lower, but let's now exaggerate--if something goes very wrong in Europe or in the world, the zloty will suffer. That's the nature of the markets, unfortunately," Mr. Belka said.