Poland’s currency remains at a “strong” level despite a recent 3.1% decline against the euro since May, according to central bank policymaker Przemyslaw Litwiniuk. The zloty’s four-month slide is the longest since 2018, driven by external factors including a strong dollar and rising fuel prices. Litwiniuk attributed the weakening to global trends, particularly the Federal Reserve’s rate hike, and noted that exporters are benefiting.
While the weaker currency boosts import prices, it hasn’t been a “major factor” in Monetary Policy Council (MPC) deliberations. The MPC has held its benchmark rate at 3.75% since March, even as inflation exceeded the target band due to spiking fuel costs. Litwiniuk expects stable rates for the rest of the year, though tightening may be considered in 2026 if inflation stays above 3.5% in 2027.
The central bank targets 2.5% inflation with a ±1% tolerance. Litwiniuk highlighted ongoing uncertainty from the Middle East conflict and potential second-round effects as key risks. The MPC’s “wait-and-see” approach contrasts with market bets on rate hikes following ECB and Fed tightening.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing