The Polish zloty (PLN) has recently come under pressure following the National Bank of Poland's decision to cut its key interest rate by 25 basis points to 4.00%. This reduction, prompted by a lower-than-expected inflation figure of 2.4% in November, indicates a cautious stance from the central bank regarding future monetary policy. Governor Adam Glapiński has noted that Poland's high budget deficit may constrain further rate cuts.
Recent forecasts suggest that the PLN may face a challenging outlook heading into 2026. According to a Reuters poll, Central European currencies, including the zloty, are expected to retreat from recent highs, with projections indicating a move to 4.25 per euro. This anticipated weakening is attributed to economic stagnation and ongoing fiscal pressures in Poland. Analysts have expressed concerns that political developments, particularly since the election of President Karol Nawrocki, may also exacerbate these challenges. Nawrocki's vetoing of multiple bills and engagement in contentious policy debates has contributed to an uncertain political climate, which could negatively impact the zloty's value.
In terms of recent market performance, the PLN has reached 90-day highs against several currencies. The PLN to USD is trading at 0.2789, representing a 1.7% increase from its three-month average. The PLN to EUR is at 0.2374, just 0.7% above the three-month average, indicating stable trading conditions. The PLN to GBP has also shown slight strength, sitting at 0.2077, while the PLN to JPY has touched a 7-day low near 43.14, though this remains above its three-month average.
Overall, while the zloty has recently enjoyed a stable performance against major currencies, the outlook remains clouded by potential economic and political headwinds that could influence its trajectory in the coming months.
