Outlook
The Polish zloty faces a mixed backdrop. Domestic growth and retreating inflation support the currency, while political instability introduces domestic risk that could cap gains. The National Bank of Poland (NBP) is projected to keep rates at 5.75% in 2026, a relatively tighter stance than the Eurozone and the U.S., which should lend support to the PLN. Poland’s economy is forecast to grow about 3.5% in 2026, helped by EU-funded investments. In this environment, the PLN is likely to remain broadly range-bound around current levels, with only modest upside if political tensions ease and growth remains solid, but limited upside if instability worsens.
Key drivers
- Political risk: A deepening rift within Poland's ruling coalition adds sustained political risk and could delay reforms or policy clarity, weighing on the PLN.
- Monetary policy stance: The NBP is expected to hold at 5.75% in 2026, keeping policy relatively tight versus peers and providing a supportive bias for the PLN unless inflation or growth surprise to the upside.
- Growth and inflation dynamics: GDP growth is forecast near 3.5% in 2026, with inflation easing to around 2.8% (core 3.0%), supporting a more favorable real stance for the PLN.
- EU funds and external environment: Investment from EU programs (RRF, SAFE) underpins growth, while global rate paths and risk sentiment influence PLN through cross-currency flows and carry dynamics.
Range
Current levels are PLN/USD 0.2793, PLN/EUR 0.2372, PLN/GBP 0.2068, and PLN/JPY 43.55. These are near their 3-month averages, with the following trading ranges: USD 0.2737–0.2867 (about 4.7%), EUR 0.2360–0.2383 (about 1.0%), GBP 0.2043–0.2084 (about 2.0%), and JPY 42.65–44.33 (about 3.9%).
What could change it
- Political developments: Resolution or intensification of the coalition rift could widen or cap PLN moves.
- NBP policy surprises: Any shift in the 2026 rate path or inflation trajectory could move the PLN.
- Macro data surprises: Outturns for GDP and inflation differing meaningfully from forecasts could alter cross-rates.
- External conditions: Changes in ECB/Fed policy, global risk appetite, or EU fund disbursement progress could drive PLN moves.
