Following the Russian invasion, EUR/PLN has seen huge swings first touching 5.0 but later falling back heavily to 4.68. Economists at Danske Bank expect the zloty to stay under pressure and forecast the EUR/PLN around the 4.70 level over coming months.

PLN hit by the war in Ukraine

“As our base-case is that the conflict will not be fundamentally resolved and sanctions will stay in place for a considerable period, we think that PLN will not fully recover its pre-war levels. Furthermore, we doubt the central bank will stay the course with monetary policy tightening when the economy weakens.”

“We see EUR/PLN moving sideways near-term but then move slightly higher over the next year. Our path for EUR/PLN is 4.68 in 1M (from 4.52), 4.68 in 3M (from. 4.54), 4.70 in 6M (from 4.58) and 4.74 in 12M (from 4.62).”