Polish Zloty Slips as Inflation Reaccelerates, Commerzbank Warns

The Polish Zloty (PLN) came under renewed pressure on Tuesday as fresh data showed inflation reaccelerating in Poland, a development that Commerzbank analysts say is weighing on the currency. The euro-to-zloty exchange rate moved higher, reflecting weaker investor sentiment toward the Polish currency.

Inflation Reacceleration and Its Impact on PLN

Poland’s consumer price index (CPI) rose by 4.2% year-on-year in February, up from 3.9% in January, according to the Central Statistical Office. The increase, driven by higher food and energy prices, marks a reversal of the recent disinflation trend that had supported the zloty in late 2024.

Commerzbank analysts noted in a research note that the inflation reacceleration complicates the monetary policy outlook. The market had been pricing in potential rate cuts later this year, but the latest data reduces the likelihood of such moves. Higher inflation typically erodes the real return on a currency, making it less attractive to foreign investors.

Commerzbank’s View and Market Reaction

Commerzbank’s currency strategists highlighted that the zloty’s sensitivity to inflation surprises remains elevated. The bank pointed out that the National Bank of Poland (NBP) is likely to maintain its hawkish stance, but the currency market remains cautious about the pace of future policy normalization.

Following the data release, the EUR/PLN pair rose to 4.28, up from 4.25 the previous day. The zloty also weakened against the US dollar, trading at 3.95 per dollar. Analysts say that unless inflation shows signs of easing in the coming months, the zloty could remain under pressure.

Why This Matters for Investors and Businesses

The zloty’s performance is crucial for Polish importers and exporters, as well as for foreign investors holding Polish assets. A weaker currency increases the cost of imports, potentially feeding further inflation, while benefiting exporters by making their goods cheaper abroad. For businesses with cross-border operations, currency volatility adds uncertainty to financial planning.

For the broader European market, the zloty’s weakness reflects persistent inflation differentials between Poland and the eurozone. While the European Central Bank has begun easing policy, the NBP has held rates steady, creating a policy divergence that could influence capital flows.

Conclusion

Poland’s inflation reacceleration is a key factor undermining the zloty, according to Commerzbank. With price pressures expected to persist in the near term, the currency may face continued headwinds. Investors and businesses should monitor upcoming inflation data and NBP communications for further signals.

FAQs

Q1: What is the current inflation rate in Poland?
As of February 2025, Poland’s annual inflation rate is 4.2%, up from 3.9% in January, according to the Central Statistical Office.

Q2: How does inflation affect the Polish Zloty?
Higher inflation erodes the real return on the zloty, making it less attractive to foreign investors. It also reduces the likelihood of interest rate cuts, which can influence currency demand.

Q3: What is Commerzbank’s outlook for the Polish Zloty?
Commerzbank analysts suggest that the zloty remains under pressure due to inflation reacceleration, and they expect the currency to stay sensitive to inflation surprises and NBP policy signals.