* UPDATE – please note that the BritishInPoland.com preferred broker is now HiFX *
What’s going on with the Polish Zloty (PLN)?
If you have a look at this graph showing the 2 year history for PLN against British Pounds (GBP) you can see that the zloty has considerably weakend over the last few months and has spent most of this year above the 5.0 mark:
Those of you who have been living in Poland for a while will know that back in 2004 when Poland joined the European Union you could get up to 7 zloty to the pound. Since then the Polish economy has steadily been growing (at a faster rate than that of the UK) so it’s no surprise to see the trend since then has been for the zloty to strengthen. In fact the zloty strengthened to just over 4 zloty to the pound back in August 2008.
PLN Exchange Advice
Due to the general decline of the pound against the zloty since EU membership the traditional advice when needing to buy Polish Zloty has generally been to buy as soon as possible to get the best exchange rate, but this advice seems to have gone out of the window recently.
I talked to my personal currency broker Martin Fox from Currency Solutions about what is going on with the Polish zloty at the moment and why the exchange rate has been fluctuating so much. The article below is the result of what he had to say.
Polish Zloty Forecast
The Polish zloty remains weak against its major international currency partners as the economic forecast is distinctly downbeat. The Polish zloty has slumped 8.7% against the US dollar and 8.5% against the euro in 2009, displaying the worst performance of 16 emerging market economies tracked by Bloomberg.
The financial crisis has hit Poland hard through a combination of reduced foreign investment and the collapse of global trade. The European Commission expects the Polish budget deficit to widen to 6.6% of GDP this year, as opposed to 3.9% in 2008, well above the euro adoption threshold of 3%. Inflation rates are also running at 2.8%, above the euro threshold of 1.5%, prompting speculation that the downturn may set back Polish plans to adopt the euro until 2013.
For the Polish government, economic stabilization and containing debt levels remain a priority at present. Internationally, confidence in global recovery is growing but the financial situation remains fragile. This had led to a revival of safe haven trading recently and zloty has remained weak on the back of this.
This week economic industrial and consumer confidence in the eurozone has risen to levels not seen since November 2008, suggesting the eurozone may be beginning the slow road to economic recovery. However while economic uncertainty prevails, zloty is likely to take direction from wider market movements such as the appetite for risk and this could bring greater volatility and low trading ranges in the short term.
To get the best exchange rates for zloty currency transfer, timing and the right information are crucial. Currency Solutions provides excellent exchange rates and personal currency brokers to ensure you get the most for your currency transfer. Registration with Currency Solutions is free and there is no obligation to trade. To register, contact Currency Solutions today.
* UPDATE – please note that the BritishInPoland.com preferred broker is now HiFX *
