Polish złoty strengthens as oil prices decline

The Polish złoty has seen a period of relief following recent lows. The USD/PLN exchange rate has retreated below 3.90, driven largely by a weakening US dollar. This shift follows a decline in Brent crude oil prices to 103.5 USD, triggered by declarations from Donald Trump regarding US non-intervention in Iran prior to the November 3 midterm elections.

For the złoty, as an energy importer, lower oil prices provide a dual benefit by reducing inflationary pressure and improving terms of trade. Regarding monetary policy, National Bank of Poland President Adam Glapiński indicated that while the Monetary Policy Council is prepared to raise rates if inflationary risks escalate, there are currently no signs of the fuel shock spreading to the broader economy. While a rate hike in November remains a possibility, market expectations for the timing and scale of tightening have shifted toward the end of the year and into 2027.