Commerzbank’s Tatha Ghose argues that recent fragmentation in Poland’s ruling coalition reinforces domestic political risk as a key drag on the Zloty. Despite assurances from Prime Minister Tusk about government stability and a “stable zloty,” the currency has underperformed peers. Ghose expects political risk to persist through elections in November 2027.

Fragmented coalition weighs on Zloty

"This incident reinforces our long-held view that domestic political risk acts as the main drag on the Polish currency."

"While the prime minister’s assurances yesterday were aimed at calming market sentiment, his citing the “stable zloty” was misleading in our opinion – the zloty has been the notable underperforming currency in the block."

"Meanwhile, the underlying political landscape has become more complicated, not less."

"The zloty’s underperformance of past year is a testament to these concerns."

"The latest infighting within the ruling coalition only underscores the persistent political risk all the way through to the general elections in November 2027."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)