* Current zloty level acceptable, Kowalczyk says
* C.bank surprised on Weds by not cutting rates
(Adds quotes, detail)
WARSAW, Oct 5 (Reuters) - The Polish zloty is trading at a level that allows the country to stay competitive, which might not be the case if the currency strengthened, the Deputy Finance Minister was quoted as saying.
Wojciech Kowalczyk told daily Rzeczpospolita that the government expected the zloty to trade at around 4.1 to the euro at the end of 2012 and to strengthen to 4.0 a year after that. It was trading at around 4.09 early on Friday.
The minister's comments were published two days after Poland's central bank held interest rates unchanged, sending the currency higher and surprising markets that had expected a cut in view of the country's poor growth outlook.
Poland is the only EU country to have escaped recession since the 2008 financial crisis, aided by a relatively weak zloty that boosted exports.
"The zloty at current levels is absolutely acceptable. It should not be too strong, as then our economy becomes less competitive," Kowalczyk said.
He also said central banks were increasingly buying Polish debt as long-term investors. Strong demand has driven yields on Polish bonds to their lowest levels in more than six years.
(Reporting by Adrian Krajewski and Dagmara Leszkowicz; Editing by John Stonestreet)
Keywords: POLAND DEBT/