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Currency Poland (PLN)

Currency Poland (PLN)

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The Polish economy has been booming. And compared to the rest of the eurozone, it can be classified as a success story. That’s why many forex traders, investors, and even tourists are interested in the country.

And if you’re interested in forex trading, you need to know about the currency. In this guide, we will tell you all you need to know about the Poland currency, from a small history lesson about it to the exchange rates and where and how can you exchange it with other currencies.

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Table of Content

What is the Currency in Poland?

It’s common knowledge that most of the European Union countries use the euro as their currency. But there are a few countries that do not. One of them is Poland.

So, what is the currency in Poland? Poland joined the EU back in 2004. But it doesn’t use the euro. Instead, it uses its national currency: the złoty.

We already know what you’re thinking, “how do you even pronounce that?” Well, the pronunciation is ‘Zual-te.’ You can also play the audio from the Wikipedia page if you want to do it justice.

The origins of Poland’s currency can be traced way back to the 14th century. Yes, you read that right. It’s an interesting piece of history.

Here is an interesting little fact. What do you think the plural of złoty is? It’s złote. Złoty is derived from złoto, which means gold in the Polish language.

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Złoto, not to be confused with złote, with an e at the end. If you’re interested in the literal translation of the word, it can be translated to “the golden one” or just “golden.”

Why Doesn’t Poland Use the Euro?

All experts agree that when the EU formed, it pioneered a new way for multiple countries to have a unified financial system under the euro. That’s why if you’re traveling to other countries in Europe, it might be a good idea to exchange Poland currency to EUR.

However, many nations are still not using the euro as their official currency. And Poland is one of them. It uses its own Poland currency.

EU nations are very diverse. This is true in the case of the economy, population, climate, culture, and more. But why has Poland not adopted the euro? Well, there is a legitimate reason for it. Poland’s economic story is quite an interesting one.

Since 1990, the country’s GDP has been increasing steadily. Poland shifted its focus to the west as a part of its economic strategy. Germany is its main trading partner. Around 70 percent of the exports from Poland go to European countries.

However, this steady growth would come to a halt. In 2008, it faced a major financial crisis, which prevented it from entering the eurozone. The country planned to enter the eurozone by 2012, but the financial crisis delayed entry negotiations.

Poland doesn’t meet two convergence criteria – long-term interest rate and exchange rate stability. This can be speculated to be one of the reasons for the official currency in Poland not being euro.

A Short History of the Currency

For a currency that dates back this far, you would expect it to have some interesting history. And you would be right. It was established during the second half of XVIII when Stanisław August Poniatowski made the złoty the official currency of the country.

It replaced the Russian ruble, which was used from 1850 to 1917. Złoty also replaced the Polish mark, which was another currency that was used from 1917 to 1924.

How do you Exchange Euros for Polish Currency?

If you aren’t familiar with the right procedures for exchanging currency, then you might end up paying high fees. At the time of publishing this article, one euro equals 4.74 złoty. In this section, we will tell you how you can exchange Poland currency.

The best place to exchange currency is a bank. This is the easiest and safest option. Whether you want to exchange Poland currency to INR, Poland currency to EUR or other foreign currencies to złoty, make sure to do it safely.

There is better news. The currency is free. This means that you can find forex businesses, currency exchange bureaus, hotel reception desks, and individual banks that can buy and sell złoty.

But the thing you should be looking for is Kantor. Banks won’t give you the best rates around. Exchange bureaus like Kantor in city centers and near hotels, shopping centers, and train stations are the best bet. They will accept only major currencies, though.

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How to Exchange Indian Rupees for Polish currency

The same goes for Indian rupees. You can exchange Poland currency for INR and vice versa at the bank. But the best is to look for Kantor locations when in Poland. It is best to use the local currency. One thing you should keep in mind when dealing with Kantor is that they might try to hustle you.

That’s why you should always be on your best game. At the time of publishing this article, one INR equals 0.059 złoty. Of course, the exchange rate isn’t fixed. So, you might want to research the latest rates when you’re exchanging INR for Polish currency.

Poland is a popular place for tourists as well. So you really won’t have any trouble when it comes to exchanging.

If you’re visiting from Poland to India, for example, then you should look to exchange your Poland currency to INR. In most cases, the banks are best. The ideal places are any RBI bank in India. You can easily convert your Poland currency to INR.

Convert Polish Currency to Euro

Use the following currency converter to quickly calculate the current Polish currency to Euro rates

Convert Polish Currency to Indian Rupees

Use the following currency converter to quickly calculate the current Polish currency to INR rates

Using Foreign Debit and Credit Cards in Poland

There is some good news and some bad news. In most places, you cannot pay with euros. It is less of a hassle if you have local Polish currency with you. Things will be much easier. There are only a handful of places that accept foreign currencies. So, if you already have złoty, there’s no need to exchange that Poland currency to EUR.

Here’s the deal, whether you are visiting Poland for business or pleasure, you will need to deal with money. And dealing with money in a foreign country can be a hassle, since you aren’t familiar with the place.

Can You Pay with a Credit Card or Debit Card?

Cash is still a popular method of payment. And this is the case in many parts of the world, for example, India. That is why you might also want to exchange Poland currency for INR if you’re visiting India.

But if you do not have any local currency, you can pay with cards too. Cards are very widely accepted in places like hotels, gas stations, retailers, restaurants, and art galleries.

There is some good news, though. You shouldn’t face any problem with that in Poland. Credit cards and debit cards are widely accepted. Even more so in tourist spots. So, you won’t face any problem regarding that.

The thing you need to keep in mind, though, is that there may be fees if you aren’t paying with the Poland currency. Here’s a pro tip, if you’re traveling to Poland, it is always a good idea to contact your credit/debit card company and let them know.

You can also ask what kind of fees might be applicable when you’re making transactions in Poland with your credit card or debit card. All major cards can be used. So, you can use Mastercard, Visa, and even AMEX in some places.

A great thing about Poland and its attitude towards card payments is how widely accepted it is, even for a small purchase. Small shops accept card payments without much hassle. And you aren’t required to show your ID most of the time, either.

But, as we mentioned, not all stores accept cards. Sometimes, for purchases from local shops, cash might be the best option. It will just make things easier for small merchants when you are using Polish currency for normal day-to-day purchases.

Public transport can be paid for with cards as well. This makes getting around the city very easy and convenient.

But not all taxis will accept credit cards. That might be a bit of a hassle. It isn’t a big deal for the most part. The thing you need to remember is that while cards are widely accepted, there might be fees.

Credit Card and Debit Card Fees

Sometimes you might need to use foreign cards instead of the local currency in Poland. When you’re using foreign credit cards or debit cards, always inquire about any related fees or charges.

Doing this will help you to stay informed and when the bank deducts a fee and you won’t be caught off guard.

Foreign Transaction Fee

Your bank will charge you this fee. And it’s exactly what it sounds like. Depending on your card, the fee can be around three percent for each transaction if you are not using Poland currency.

This is a non-sterling fee. Let me break down the numbers. It is 3 euros for every 100 euros you spend.

Merchant Currency Conversion Fee

The merchant banks charges this fee. Conveniently, some Polish merchants might accept payment in other currencies. And that’s where this charge comes in. So, the merchant’s bank may add a charge for that. It’s called DCC, short for Dynamic Currency Conversion.

Here’s the thing, though. It might just be cheaper to pay with cash in some cases. So, you might be better off paying with Poland currency in cash to save some money.

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What About ATMs?

You might also want to pay using ATMs as well. The good news is you’ll find ATMs all over the place. So, if you’re out of Poland currency, you don’t need to panic. There are about 22,000 ATMs across the country. Quite a crazy number. So, cashing out won’t be a problem.

The most common places to find ATMs are near banks, of course. Other places are near airports, town centers, supermarkets, rail stations, and other foot traffic-heavy popular places.

The ATMs connects to the international network. But as we mentioned above, it’s always a good idea to check with your bank when using your cards abroad. There might be extra fees or charges. But there are mostly no charges when using the local ATMs for foreign cards.

You should always be careful when using the ATM. Make sure to block the view when you put in your PIN code. Cashing out in busy places is generally safer.

Is Polish Currency a Good Currency to Trade?

Before you convert all your Poland currency to EUR, let’s see whether the złoty is a stable and a good currency to trade.

When choosing a currency to trade, you need to make sure that it’s stable and investors have confidence in it. Fortunately, the Polish currency is one such currency. It is a good currency to trade.

In forex trading, the currency is PLN. It’s pretty stable. There are mainly two factors that show how stable a particular currency is. One is, of course, how frequently the prices fluctuate compared to other currencies.

Another sign is domestic price level changes for Poland currency, which refers to whether or not it is stable against various goods and services. Fortunately for trades, the Polish currency has been pretty stable. Inflation in Poland has been generally low. This is true even when you compare Poland to other eurozone countries.

This has caused the Polish currency to retain its purchasing power and remain generally stable. The PLN is not only stable domestically. It is stable internationally as well. This gives even more confidence to traders of the Polish currency.

The head of the Warsaw Stock Exchange said that the Polish currency is even a good choice as a reserve for other countries.

Trading Forex – How Do You Trade EUR/PLN?

If you want to trade forex with the currency pair of EUR/PLN, you do not necessarily need to convert your Poland currency to EUR. But knowing the right way to do so is very important.

You not only want to be sure that you have the right strategy, but you are selling and buying at the right time with a Poland currency and a euro pair.

Analyze the Market

Before commencing any trades, you should always analyze the market. In-depth research is one of the main foundations for any successful forex trader when it comes to Poland currency and the euro. Or any other currency pair. It will give you solid data which then you can use to make your move.

Otherwise, you are just guessing and hoping for the best. Don’t get overwhelmed by the amount of information you’ll find. It might throw you off in the beginning. However, as you research more strategically and dive into currency pairs, it will start to make more sense.

And you will get more and more value out of your time. Check current and historical charts and always keep an eye on the news too!

Reading the Quote

When you’re working with currency pairs, you will be given two prices. The first rate will be the price which you can sell the pair for. The second one is the price you can buy the pair for.

There is also the spread. This is the difference between the first and second rates. And it’s the amount the dealer charges for making the trade happen. But be careful though. The spread can vary a lot when it comes to trading. Make sure to find competitive spreads.

Picking Your Position

With forex trading, you can speculate on the movements of the currency. This means you can predict whether it will go up or down on the market.

Buy Position

A buy position means that you think that the base currency value will rise compared to the quote. If you’re buying EUR/PLN, you think that the value of EUR will rise against the Poland currency. Meaning that the EUR is bullish.

Sell Position

On the other hand, what if you think that the base currency will decrease in value against the quoted currency in the pair? Let’s take a look at the previous example. If you’re selling EUR/PLN, you think that the EUR is bearish and the Poland currency, PLN, is bullish, meaning that PLN will increase in value against EUR.

Historical Charts and Live Rates PLN/EUR

The following chart presents historical and live rates between EUR and Polish currency.

Our Analysis of Polish Currency Drivers

The drivers for the Poland currency can be classified into two categories: short-term drivers and long-term drivers.

For the short-term drivers, the main factors are economic growth, interest rate, inflation rate, capital account balance, currency speculation, and current account balance. Whereas, for the long-term driver, there are more factors.

They are mainly competitiveness, technological development, budget deficit, capital flows, and economic development.

Economic Growth Rate

As we mentioned before, most trade for Poland is with Europe. It accounts for 70 percent. This has led to foreign traders seeing the Polish currency as very closely tied to the euro itself. The economic growth in Poland has been higher than in the eurozone.

The fast and rapid growth of Poland was also met by depreciation in the złoty. This is due to the income effect. The growth increases the demand for imported goods due to the people having more disposable income.

This causes a hike in the supply of złoty and thus leads to depreciation. Also, a study conducted by Boykorayev shows the increase in the GDP is pretty important when explaining the rate of nominal depreciation.

Interest Rate

 A country can attract large sums of short capital flows by keeping its interest rates high. This caused the currency to appreciate during the period between 2000 to 2001, and the interest rate in Poland was relatively high. And its currency experienced appreciation.

The interest rates were lower between 2002 and 2023. This caused the currency to depreciate. But, in the following years, any such relationships were not clear.

The exchange rate fluctuated normally with the interest rate parity from 2007 to 2008. By the end of 2008, the EUR/PLN exchange rate reversed. This was due to the global financial crisis.

The Polish currency started appreciating in 2010. And this cannot be justified by just changes in interest rates.

Inflation Rate

If there is an increase in the price levels in a country, the currency depreciates. This is because prices increase for imported goods as the domestic market is more expensive.

The złoty fluctuated widely between 2000 and 2013 and it was disconnected from the fundamentals. The inflation rate in Poland in 2009 was higher than in other countries in the eurozone, which caused the currency to depreciate by 23 percent.

And naturally, the opposite occurred in 2003 when the inflation rate was lower and the currency appreciated.

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Variable from 1.0 bps in EUR/USD

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79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

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Balance of Payment

Balance of payment is an important factor when it comes to exchange rate of volatility. This is because demand for a currency is generated from net export. However, the supply of a currency comes from foreign investment. International trade has the largest impact on the exchange rate.

Government Deficit

Budget deficits will make the Polish government borrow money from the money market and foreign banks, domestic banks, and financial institutions, along with investors, are the main creditors.

It creates high foreign currency flow to Poland and also increases the demand for the złoty and causes it to appreciate. Still, this relationship is very complex.

Wrapping Up

Well, there you have it. Now you know all there is to know about the Poland currency, złoty. It has an interesting history, which you might want to dive into in more detail if that interests you. It’s pretty stable, too, which makes it a good currency to trade when it comes to forex.

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