In 2017 the Polish Złoty (PLN) was one of the two strongest commonly used currencies worldwide along with the Czech Koruna (CZK).
The PLN proved to be very strong particularly with reference to USD (15% profitability), which is a record-low USD 'result' for 13 years. Was this because of the overvalued US currency in previous years? Possibly yes, but it cannot also be ruled out that foreign investors believed in the good signals coming from the Polish market, noticing other European economies also picking up, all which have been mitigating the risk of EU disintegration expected after the Brexit decision.
So, what can be expected in the future? According to the recent trends, there have been no two consecutive years where the PLN has been continuously appreciating against the USD, but maybe 2018 is the year this trend is broken.
Interestingly, a weaker dollar has meant that the average gross monthly wage in the Polish business sector landed closer to USD 1,500 which has contributed to the growing interest of non-EU workers (particularly from Ukraine) in taking up employment in Poland.
It is also worth noting that other CEE currencies stood well against the USD in 2017, i.e. Hungarian Forint (HUF) gained ca. 10%, while the Romanian Leu (RON) ca. 9%. This may be further evidence of the fact that Poland and the whole CEE region are better regarded by foreign investors nowadays.
Not only USD but also the EUR depreciated against the Polish currency in 2017, by approx. 5%. However, that change was mainly caused by the intervention of the Polish government in exchange markets.
Some consider the strength of the PLN as a sign of increasing economic fundamentals for Poland and has lead Poland to worry about the consequences of possibly adopting the EUR in the future (Poland has committed to this; however a starting date has not yet been confirmed).
If we also take market concerns into account regarding the "cappuccino" or "teuro" effect (immediate price increases caused by the rounding up of the “new” EUR prices), it is not surprising that recent polls show that 50% of Poles want to stay with the PLN, with only 15% support the prompt introduction of the EUR in Poland.
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