What is the PLN (Polish Zloty)
The PLN (Polish zloty) is the currency used in Poland. A single Polish zloty is subdivided into 100 grosz and is often represented by a symbol that looks like the lowercase Latin letters "zl" with two horizontal ticks about halfway up the "l."
The word zloty is the masculine version of golden.
BREAKING DOWN PLN (Polish Zloty)
Only the Narodowy Bank Polski (NBP), the Republic of Poland’s central bank, may issue the PLN (Polish zloty). In addition to banknotes, the NBP also mints coins for both general circulation and collectors. The regulations stipulating the release of coins and notes are laid out in the Monitor Polski, a publication of Poland’s prime minister. The central bank also bears responsibility for maintaining price stability. Since 2004, the bank strived to limit inflation to a target rate of 2.5 percent, plus or minus 1 percent.
According to World Bank data, Poland seems to have gotten its financial house in order. The country experiences 0.4% annual inflation and has a gross domestic production (GDP) of 2.9%, as of 2016, which is the most current year of available data.
In forex markets (FX), the most common pairings for the Polish zloty in currency trades tend to be the U.S. dollar (USD), the euro (EUR), the Swiss franc (CHF), the British pound (GBP) and the Australian dollar (AUD).
History of the PLN
The Polish zloty’s name comes from “zloto,” the Polish word for gold, and traces its existence back to the middle ages. The current Polish zloty marks the currency’s fourth iteration.
- During the first zloty period of the 14th and 15th centuries, the word zloty initially indicated any gold coin. The zloty became the official currency in 1526 when monetary reform revalued it, and it remained legal tender until 1850. At this point, the Russian ruble then the Polish marka replaced the zloty.
- 1924 saw the introduction of the second zloty. Years of hyperinflation after World War 1 caused the conversion rate of 1 zloty to 1,800,000 markas. The PLN had pegged to the U.S. dollar. Ongoing economic crisis and inflation continued to haunt the Polish currency. Through World War II and later Soviet occupation, the country continued printing and using the zloty.
- In 1950, the replacement of all existing Polish zloty (PLN) began the third zloty period. Hard financial times continued for the country forcing Poland into debt lasting until 1994. These notes carried the symbol PLZ
- During the fourth zloty period, the government exchanged new banknotes for the existing currency. However, the early issued new notes were easy to counterfeit. In 1994, redenominated of all money happened, and the old PLZ ceased to be legal tender.
The conditions of Poland’s entry into the European Union (EU) in 2004 requires the eventual adoption of the euro. Poland still has not set a target date for conversion to the euro. Also, a combination of poor popular support and the rise to power of euro-skeptic political parties in the Polish parliament appear to make such a move unlikely in the near term.