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The Polish zloty is strengthening: NBP cuts rates, dollar weakens
The Polish zloty continues to strengthen in the foreign exchange market, despite the National Bank of Poland's (NBP) key policy rate cut to 4.75%. The weakening US dollar is supporting the currencies of Central and Eastern Europe.
According to the European Central Bank, the exchange rate of PLN to EUR as of September 4, 2025 is about PLN 4.25 per EUR 1, which indicates the stability of the currency.
What's going on?
In September 2025, the NBP cut its key policy rate by 25 basis points to 4.75%, continuing to ease monetary policy. This decision is aimed at controlling inflation, which will remain stable until the end of the year.
The zloty gained 0.3% against the euro, similar to the Hungarian forint (HUF 393 per EUR 1) and the Czech koruna (CZK 24.45 per EUR 1). A weaker dollar (DXY ~98) and a 6.2% increase in Czech retail sales in December 2024 bolster the regional economy.
Significance for the economy
The NBP's rate cuts are balanced between curbing inflation and stimulating growth. According to PKO BP's chief economist, the bank avoids drastic changes by focusing on short-term forecasts. This contributes to the competitiveness of the zloty and attracts investors.
The main consequences:
Cheaper loans for business.
Potential rate cut to 4.5% by the end of 2025 if inflation remains low.
Strengthening regional currencies such as the forint and krona.
Impact on investors
The strengthening of the zloty affects the markets of Central Europe. The Prague and Bucharest stock indices are rising, while Warsaw and Budapest are experiencing a decline due to local factors. A weaker dollar reduces risks for exporters, making the region's assets more attractive.
Investors should:
Follow the statements of the NBU.
Consider diversification opportunities in Central Europe.
Political and regional context
The political situation in Poland has a significant impact on the stability of the zloty. After the 2023 parliamentary elections, the government has focused on economic stability, but possible changes in the government could affect monetary policy.
The rise of the zloty also reflects global currency developments, in particular the weaker dollar and the economic resilience of the region. The growth in Czech sales confirms these trends. Poland could become a leader in attracting foreign capital if the NBP remains flexible.
The strengthening of the Polish zloty is the result of the NBP's prudent policy and favorable global trends. This opens up growth opportunities for investors and businesses, but requires vigilance to political and economic signals.
Follow NBP news and regional trends to take advantage of the stable economy of Central Europe.
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