Putin will overturn the zloty? I think a dead body after NBP!

Russia's aggression against Ukraine triggered a sharp increase in risk aversion, causing the zloty to strongly depreciate against the main currencies. Mostly against the dollar. The USD / PLN exchange rate increases by PLN 18 to PLN 4,23, and the dollar is the most expensive in two years. The Swiss franc soared up by PLN 15 to PLN 4,57, setting new historical records. The EUR / PLN exchange rate increases by PLN 12 to PLN 4,71, which is a level that has not been viewed since the end of November 2021.

The zloty, forint and Czech koruna are losing

The large sell-off of the zloty is not an isolated case. The currencies of Hungary and the Czech Republic are also losing heavily. Will Russia's attack on Ukraine cause an even deeper sell-off of the Polish currency, causing economic problems and significantly increasing the already huge inflationary pressure in Poland?

A sell-off of the zloty in a situation where risk aversion grows significantly is something natural. Especially in a situation where the Polish currency was not too strong before. However, the scenario of its large discount does not necessarily come true. National Bank of Poland has the necessary instruments to defend the zloty. The first is verbal intervention. Then the actual intervention on the market to strengthen the zloty. And both of these things can happen very soon. President Adam Glapiński has repeatedly said that interventions are reserved for situations where the exchange rate is unstable.

The greatest firepower, however, is the exchange of funds that Poland receives from the European Union, not at the NBP as before, but on the currency market. This would ensure lasting support for the zloty. 

USD / PLN

USD / PLN daily chart. Source: Tickmill

EUR / PLN

EUR / PLN daily chart. Source: Tickmill