The Polish zloty (PLN) has seen a notable decline in recent weeks, plummeting nearly 3% against the euro following the National Bank of Poland's unexpected decision to slash interest rates in September. Governor Adam Glapiński justified this move by citing a “radically changed” economic outlook, particularly due to the looming recession in Germany, a vital trading partner for Poland. The deterioration of the German economy, marked by a sharper-than-expected drop in industrial production, raises concerns for Polish exports which are closely linked to Germany’s performance.
The impact of external factors, such as the continuing war in Ukraine, has also contributed to volatility in the zloty. Analysts observe that prior to the conflict, the PLN traded around 4.0 to the USD. Currently, the PLN to USD exchange rate stands at 0.2722, which reflects a 1.2% increase compared to its 3-month average of 0.269. This pair has exhibited relatively stable trading, with an 8.0% range between 0.2613 and 0.2823.
In terms of other major pairs, the PLN to EUR rate is at 0.2345, close to its 3-month average and within a steady 6.5% range from 0.2332 to 0.2483. For the PLN to GBP, the exchange rate of 0.2033 is 1.7% higher than its 3-month average of 0.1999, maintaining a consistent trading range of 7.9% between 0.1965 and 0.2121. Meanwhile, against the Japanese yen, the PLN is reaching 60-day highs at approximately 40.51, which is 4.1% above its 3-month average of 38.9, reflecting a stable trading range of 7.4% from 37.73 to 40.54.
Given these developments, businesses and individuals engaging in foreign transactions may want to remain vigilant regarding the PLN's volatility and its relationship with economic conditions in both Poland and its key trading partners. The outlook suggests that continued monitoring will be essential, especially with the economic uncertainties in Poland and abroad.
