Commerzbank’s Tatha Ghosh argues that recent fragmentation in Poland’s ruling coalition strengthens domestic political risk appetite as a major drag on the zloty. Despite Prime Minister Tusk’s assurances about government stability and a “stable zloty”, the currency has underperformed against its peers. Ghosh expects political risks to remain during the elections in November 2027.
Fractured coalition weighs on zloty
“This event reinforces our long-standing view that domestic political risks act as the main downward pressure on the Polish currency.”
“While the Prime Minister’s assurances yesterday were intended to calm market sentiment, his reference to a “stable zloty” was misleading in our opinion – the zloty has been a notable underperforming currency in the bloc.”
“Meanwhile, the underlying political landscape has become more complex, not less.”
“The zloty’s poor performance last year is testament to these concerns.”
“The latest infighting within the ruling coalition underlines the continued political risk ahead of general elections in November 2027.”
(This article was created with the help of an artificial intelligence tool and reviewed by an editor.)
