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The złoty is losing strength against the euro and the dollar. What does REER say?
After two years, the strong zloty is starting to give back some of its gains
There has been an important shift on the Polish currency market. Over the past six months, the very strong trend of real appreciation in the zloty has reversed — in other words, its strength after adjusting for inflation has started to decline. In practical terms, that means the zloty is no longer as strong as it was until recently.
Against the euro, the turning point came at the end of February 2025. The EUR/PLN rate then fell to 4,1275 zł and matched the local low from January 2018. If it had moved lower, below 4,1270 zł, it would have been the weakest since July 2015.
After that, the euro did not get any cheaper. President Trump’s trade wars pushed the rate up to around 4,30 zł, and the next low came in January 2026. At that point, the euro cost just under 4,20 zł. Then tensions in the Middle East weakened the zloty and drove the rate to 4,35 zł.
That matters because from October 2022 to March 2025, the Polish currency had been gaining very strongly in real terms. That phase now appears to be over, although that does not automatically mean a sharp reversal. For now, what stands out is a gradual weakening of the zloty’s real strength rather than a sudden turn.
For people exchanging money, it is not only the nominal exchange rate that matters, but also how much purchasing power wages and savings retain. When the zloty weakens in real terms, exports usually benefit, and inflation pressure can rise. For the economy, it is a mix that can be positive for companies selling abroad, but less convenient for people buying foreign currencies.
It is also worth remembering historical parallels. The previous two times the zloty reached such a high level of real strength ended in June 2001 and July 2008. In both periods, that was accompanied by a deep bear market on the Warsaw Stock Exchange (GPW — Giełda Papierów Wartościowych) and a clear slowdown in Poland’s economic growth.
The current situation is not a copy of those years, however. The earlier episodes of strong zloty appreciation were very abrupt, while the current one was built over a longer period, over two years. What is more, the previous peaks in the real exchange rate came during a mature stock-market downturn, whereas WIG20 and WIG are still setting records now. The change is therefore significant, but its course looks different from 2001 and 2008.
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