The Polish Zloty (PLN) has experienced several key developments over the past few months that have influenced its exchange rate dynamics. A significant factor has been the monetary policy shift by the National Bank of Poland (NBP), which reduced its benchmark interest rate by 50 basis points to 5.25% in May 2025. This decision was driven by a notable decline in inflation, which fell to 4.3% annually in April 2025, now further decreasing to 4.1% by May. Analysts suggest that market expectations are leaning towards more rate cuts from the NBP, which could exert downward pressure on the zloty.
Political uncertainties following the election of President Karol Nawrocki in August 2025 have added another layer of complexity to the zloty's outlook. Challenges in advancing legislative agendas may impact fiscal policies and economic stability. Furthermore, ongoing global trade tensions, especially with the United States, have raised concerns about Poland's export-driven economy, further complicating factors that could affect the zloty.
In terms of performance against major currency pairs, the PLN to USD is trading at 60-day lows near 0.2706, which is 1.3% below its 3-month average of 0.2743, reflecting a stable trading range of 3.3% between 0.2703 and 0.2792. Meanwhile, the PLN to EUR stands at 0.2351, hovering near its 3-month average and demonstrating low volatility with a trading range of 1.2% from 0.2335 to 0.2364. The PLN to GBP is currently at 0.2061, marking 7-day lows and just 0.9% above its 3-month average of 0.2043, within a stable range of 2.8%. Finally, the PLN to JPY is observed at 41.75, which is 2.0% above its 3-month average of 40.93, maintaining a relatively stable trading range of 5.6%.
Overall, analysts indicate that the combination of monetary easing, political challenges, and global trade relations will continue to drive the PLN's volatility in the short term, requiring careful monitoring for potential impacts on international transaction costs.
