The zloty has not strengthened much despite the Polish central bank (NBP) hiking policy rates to 6.5%. Economists at Danske Bank see further upside potential on the EUR/PLN pair.

Zloty facing global headwinds

“Polish monetary tightening has been too slow in coming and too modest to curb the huge inflationary pressures. Furthermore, the global economic slowdown, the Ukraine war and USD strengthening have also hurt the PLN. With these effects likely to remain in place, we expect the PLN to weaken.”

“Forecast: 4.72 (1M), 4.74 (3M), 4.76 (6M), 4.76 (12M), 4.78 (end-2023).”