Weak zloty to pay off for Polish economy

After 2020, many analysts will think before presenting their long-term currency forecasts. It turns out that there are very frequent signals on the market that can turn the game conditions upside down. However, it is worth taking a look at the events we know about now, which will have the greatest impact on the zloty and exchange rates in the coming year: the development of the pandemic, interest rates, the situation in the US, and Brexit.

"For some unclear reason for a large part of analysts, the MPC is considering a rate cut. It cannot be ruled out that they know something that external analysts do not know. Nevertheless, this move is surprising in the markets. The closer the rate cuts, the more the zloty will be. Of course, it cannot be ruled out that the Monetary Policy Council will change its mind, since the year is already closed, and the weak zloty allowed to generate a profit at the NBP, resulting from the appreciation of currencies. In such a scenario, if the perspective of interest rate cuts were to recede, we should expect the domestic currency to strengthen," Maciej Przygórzewski, chief currency expert of Walutomat and InternetowyKantor.pl, noted.

In his opinion, a weak zloty is more profitable for us in terms of stimulating economic growth.

"Our wealth in foreign currencies will decrease, but the weak currency will strongly support exporters and domestic producers, which should have a positive impact on the labor market. On the other hand, the Polish economy is coping very decently in the crisis. Mostly currencies of countries that are doing well, they finally attract investors' attention,” Przygórzewski emphasized.

(PAP)