20 Zlotys (January Uprising) – Poland

In 2023, Poland's currency, the złoty (PLN), navigated a year of significant volatility and gradual stabilization against major currencies like the euro and the US dollar. The year began with the złoty under pressure, influenced by high inflation—which peaked above 18% in early 2023—and a series of aggressive interest rate hikes by the National Bank of Poland (NBP) in the preceding years to combat it. Geopolitical uncertainty from the ongoing war in Ukraine and a global environment of monetary tightening also contributed to investor caution, keeping the currency weaker in the first half of the year.

A pivotal shift occurred mid-year, driven by a faster-than-expected decline in inflation, which allowed the NBP to begin a cautious easing cycle with a 75-basis-point cut in September. This dovish turn, coupled with a resilient economy that avoided a widely predicted recession, boosted market confidence. Consequently, the złoty strengthened notably, becoming one of the best-performing emerging market currencies in the latter part of 2023. This appreciation was further supported by strong inflows of EU recovery funds and a general weakening of the US dollar globally.

By the end of 2023, the złoty had consolidated its gains, trading at its strongest levels against the euro in over two years. The currency's performance reflected a broader narrative of Poland's economy weathering external shocks better than anticipated, with moderating inflation reducing domestic pressures. However, the NBP's careful approach to further rate cuts remained a key focus, as policymakers balanced supporting growth with the need to ensure inflation continued its downward trajectory toward the target, setting the stage for monetary policy to be the dominant factor for the złoty in 2024.