The zloty exchange rate depends on key decisions around the world. Here are the possible scenarios
— The exchange rate of the zloty in the near future will depend mainly on events in the Middle East. If a lasting agreement is reached, we can expect a move towards breaking the level of 4.22 or even around PLN 4.2 – Mirosław Budzicki, PKO BP strategist, told PAP.
The economist emphasized that a possible agreement would result in a further decline in crude oil prices, which have already fallen from over USD 110. per barrel in the first half of May to over $90. Currently. According to the PKO BP strategist, the agreement would mean a drop in oil prices to around $80. Moreover, the inflow of foreign capital to the treasury bond market will benefit the Polish zloty.
— The supply of Polish treasury securities will remain high later in the year, as in 2027, which will see a high deficit. We also have an inflow of foreign investors to the Polish market. This supports the zloty as well as the growing demand for risky assets visible on global markets. It is clear that there is demand for technologies and AI and that the Polish stock exchange is taking advantage of it because it behaves very well in relation to other markets. We are benefiting from the positive mood on global markets and there is no sign that this situation will change.
In his opinion, however, there are also factors that may negatively affect the valuation of the Polish zloty. As an example, he pointed to the increase in interest rates in the euro zone, which economists expect next week. He noted, however, that the increase in rates at the ECB has already been fully priced in and that analysts expect a corrective increase, not the start of a cycle of interest rate increases. However, if a cycle were to occur, it would affect the zloty.
— I think that the conference of the President of the National Bank of Poland, Adam Glapiński, may also have an impact on the valuation of the zloty. His speech at the conference was aimed at cooling expectations for interest rate increases in Poland – at the beginning of the month, investors expected two increases by a total of 50 basis points, while the Monetary Policy Council currently seems unwilling to make any increases – said the PKO BP economist.
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Another factor that may work against the Polish zloty is the current account deficit. However, these factors are not strong enough to lead to a significant weakening of our currency.
– If we are talking about the next few months, we can expect the zloty exchange rate to remain within the range of PLN 4.22-4.26 per euro, and from a broader perspective – in the range of PLN 4.2-4.3 – said Budzicki. — It is worth adding that the level of PLN 4.24 is the average exchange rate of the Polish zloty to the euro from the beginning of 2025.
Good news for the Polish market
The economist added that several factors have recently emerged which may not affect the zloty in the coming months, but in the longer term they allow for optimism regarding the strength of our currency.
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— Recently, S&P Dow Jones Indices (S&P DJI), a global provider of stock indices and market indicators, announced that conducts consultations on the reclassification of Poland as a developed market. This would mean moving Poland from indices covering developing markets to indices for developed markets. This is a fundamentally positive opinion for Poland, because it shows the strength of the Polish economy and is a confirmation that we are still developing, said the PKO BP economist.
Another example of such good information was – according to Budzicki – the comment of the S&P rating agency, which suggested that under certain conditions it is possible to increase the Polish rating.
— Recently, there have also been reports that the US could place nuclear weapons in Poland. This is another element that strengthens our country in an uncertain geopolitical situation and is of great importance from the point of view of investors. All this together shows the structural change of the Polish economy and confirms the further direction of its development, said Mirosław Budzicki.
