Zloty Continues to Strengthen Against Foreign Currencies
The zloty, Poland’s native currency, has continued to appreciate against foreign currencies for the third consecutive month, with the largest scale of appreciation seen against the euro. According to reports, the EUR/PLN exchange rate was at its lowest level since June 2022. In April alone, the zloty gained slightly over 2 percent against the euro and 3.66 percent against the US dollar, reaching levels last seen in February 2022.
Despite the decisions of central banks, such as interest rate increases in the US and the same prospects for movement in the euro zone, which reduces the difference in interest rates between the currencies, the zloty remains strong. This is believed to be primarily due to a large surplus of exports over imports, which has kept the currency strong in the face of external factors.
However, the decreasing difference in interest rates between the US, the euro zone, and Poland could potentially work against the zloty in the future. While there are currently no plans to lower interest rates in Poland, some reports suggest that there may be a possibility of a 25 basis point cut in the autumn.
Despite the current strength of the zloty, some experts believe that the currency may be put to the test in the future, and the current exchange rates may be some of the most favorable for the possible purchase of foreign currencies.
Overall, the strength of the zloty against foreign currencies, particularly the euro and US dollar, reflects the strong economic performance of Poland and its ongoing trade surplus. While the zloty’s strength may be tested in the future, the current situation suggests that the currency is likely to remain strong in the near term. The central bank’s decision on interest rates in the coming months will be closely watched by investors and analysts alike.
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