Value of Zloty and UK £ in Poland

With all the bad news and pessimism about the performance of the Polish Economy and its prospects over the next year or so, along with the relatively stabIity of the UK Economy, why do you think that over the last few months the exchange rate between the two currencies has fallen from around 5.20 pln to £1 to a low today of 4.95?

Any Economists on here willing to suggest an answer?
Thanks....

Your information is garbage and I can only deduce that you read some pitiful rag magazines in Poland. Britain is going through enormous austerity and in the worst recession since the second world war. Where did you learn that it was stable? Poland is one of the few countries not to go into recession over the last five years. Your currency has strengthened, not weakened.

Why don't you come to Britain and sign on the dole. You will make lotsa money

Hi Oxon,
Actually, you're completely wrong in your deduction.
I'm English, well over 40 years old and have lived and worked in London all my adult life.
I know what state the UK economy is in. Things are bad here but do not appear to be getting that much worse compared to 2 years ago.

From what I read and hear the sitution in Poland is bad and expected to get worse: house prices falling, unemployment rising and wages amongst the lowest in Europe with many Poles moving abroad in search of a better life.

I'm curious about the falling exchange rate because I'm about to move there, selling my house in London and looking to move my money to Poland.

I just cannot understand why the value of the £ has fallen so much recently against the Zloty.
Since I started selling my house in september 2012, the amount of Zloty I will get for my £ has dropped by 20% and I don't understand why, particularly as the Central Bank in Poland keeps reducing its base interest rates and this makes no sense to me.

If you are able to offer any views on this I'd appreciate hearing from you.....It's been many years since I studied Economics. !!

Poland is a heavy exporter of agricultural products and manufactured goods. It is very much in the interest of the Polish central bank to keep export prices low.

Trying to find out the reason for a 25p fall?


Oh, I see. No more questions.

Good night. :):):)

There is no easy answer to that. But one has to consider the fact that Zloty currency becomes at times object of speculative transactions of big financial institutions and since it is not a "big volume" currency, its value can be relatively easily influenced by those institutions. Also, some of the analysts tend to group several smaller currencies together (e.g. Zloty and Hungarian Forint) when it comes to decision making. Then, if Hungary goes down economically, they will sell Forint and automatically Zloties as well, even if Poland's economy has been in no way adversely affected.

The market dictates the currency rates NOT the NBP otherwise it would be market manipulation. The reason for rally on the PLZ is due to the fact the NBP has signalled an end to easing of interest rates. The next meeting for rate setting will be in March 2013.

Now if it were that simple, the moon would be made of green cheese. As you well know, a country has various mechanisms by which they can effect change in the exchange rate.

Naturally there are a whole range of factors at play. Not least the flow of raw materials and manufactured goods in and out of the country as well as commodity prices and food availability.

Rather than trying to revive a pointless argument you lost in another thread, why not tells why you think the zloty recently rose in value?

NBP has signalled an end to easing of interest rates which has caused the PLZ to strengthen over the last two days. We will now have to wait for the next set of CPI and RPI figures to be released.

NBP has cut their rates by 0.25 percentage points, recently, indeed, but that usually causes the PLN (not: PLZ) to lose value since polish bonds will now pay less interest and this normally discourages foreigners from investing in them.

Exactly. At least the bonds are a safer bet, but Poland is caught in the same trap as the UK. Their bonds are too solid.

This comment is addressed to Pawian......................
So that equates to roughly 25,000 PLN per £100,000.
I hope you'll agree that's a fairly substantial amount......certainly enough to buy a decent second hand car !!!

Come on, you can spell my first name with small letters, I am not so nitpicking.


OK, now I see it and agree with you.

A few reasons

- high demand for Polish bonds. Maybe misplaced optimism as the underlying deficit numbers are quite a concern but still probably safer than France not to mention Italy etc and a more liquid market than Czech or Hungary.

- often is quite a lot of strength in December as govt likes to support zloty in order to manipulate some ratios. Actually it did that far less this year. There is also a bit of a seasonal effect from migrants sending cash back in December which creates a demand for zloty.

- is still quite a lot of inward investment especially in the service sector. In addition lots of Western investors who would repatriate profits are now keeping them here as there is not much to invest in back home.

Most of my own banks have been telling me zloty is overvalued for about 2 months now but it has still kept appreciating steadily. If you want to wait for a good moment then once the next bout of nonsense starts in the US about fiscal cliffs that will weaken the zloty even if only for a few days - you could wait until then and you might get 5,05 instead of 4,95.

I would say it is very difficult to predict currency futures below is a link to the historical's tititudorancea.com/z/gbp_to_pln_exchange_rates_british_pound_polish_zloty.htm

Correct PLN is the new abbreviation and PLZ is the old one, its a little like UK or GB, from the reports I have been reading there is future concern for Polish bonds, the reason for the current take up is down to the limited options and an appetite for emerging markets, PLN was one of the top five performing currencies in 2012, the main question one has to answer is what is supporting the PLN and how long can the euphoria last, the current strength of the PLN in my opinion is not based on fundamentals more on a lack of options.

The only bet I would make myself is on the NBP lowering interest rates at the next meeting.

Don't you remember the exchange rates in first half of 2008? THAT was a real euphoria. $1 stood at PLN 2,08. Now it is worth 50% more, alas!

I doubt it was a euphoria. Goldman Sachs and/or the like manipulated the rate exchange of the Polish currrency. It didn't last a long time, though ...

It lasted several months, quite enough to enjoy really cheap vacation in US, including super cheap shopping :-)

Below is the graph showing the dollar/zloty rate from 1st January 2006 until 1st January 2010. It seems to me now that the dollar followed a long path of decline versus the zloty which lasted since the second half of 2006 until the middle of 2008. Then it rose sharply over a relatively short period of time to reach the heights of about 3,80 zloty for 1 USD.

money.pl/pieniadze/forex/waluty/forex,gbppln.html

Now the GBP is around 4.87PLN -- been dropping this week again.

Last year GBP dropped as low as around 4.16PLN if my memory serves me.

I think GBP has weakened because the UK CB talk about more money printing and cutting IRs further from the already low 0.50 (yes you read that correctly)

Whether they do or are just bluffing to race GBP to the bottom we can debate, but trashing the pound is causing inflation there.

What caused the UK pound to lose value against the Polish zloty yesterday afternoon, while the pound still continued to gain ground against the US dollar?

Or was it merely the dollar weakening following the very much expected (by me) no tapering announcement from Helicopter Ben?

Here, they say the pound is up following various bullish mutterings by the UK central bank.

Yet at around about the same time, GBP lost 10 groszy against PLN, falling from about 5.06 to 4.96 (and has since fallen further).

What powered PLN up to cause this loss of ground by GBP against PLN?

PLN is now a stronger currency -v- GBP than USD because Ben didn't taper?! :D

Weak retail sales for August in the UK.