The zloty steadied on Tuesday after touching its weakest levels in years. Reuters reported the currency stabilising off its lowest since the start of 2024, with central European currencies generally caught in the US dollar’s wake. Bloomberg, which reported the slide to a three-year low on Monday, tied the move to a row over the National Bank of Poland itself.
The dispute is over the central bank’s management board appointments, and it has become a market variable because of what it threatens. The Monetary Policy Council left the benchmark rate at 3.75 percent in October, where it has stood since March on the council member Przemyslaw Litwiniuk’s account, while inflation rose to 4 percent in September, above the 2.5 percent target and outside the top of its one point tolerance band. Litwiniuk has called the slide mostly global, a stronger dollar after the Federal Reserve’s September hike and dearer fuel, and his base case is no rate change for the rest of this year, with tightening a 2027 question if new forecasts keep inflation above 3.5 percent in late 2027.
That is precisely why governance matters here. A currency held up by a 3.75 percent policy rate while peers price cuts elsewhere is a currency priced on institutional credibility. Reporting on the dispute notes that a perception of political influence over rate decisions would damage the zloty more than the procedural disagreement itself, and points to the November parliamentary vote as the next test. The National Bank of Poland’s own statement announces no rate change and no disruption to decisions, so for now the row is a risk premium, not a policy event, and Tuesday’s stabilisation says the premium stopped growing, for one session.