Polish złoty

Złoty (literally meaning "golden", plural: złote or złotych, depending on the number) is the Polish currency unit.

ISO 4217 currency code: PLN

As a result of hyperinflation in the early 1990s, the decimal point on the currency was moved by four places. Thus, on January 1, 1995, 10,000 old złotych (PLZ) became one new złoty (PLN).

Historical Currencies

Złoty in the Kingdom of Poland and Polish-Lithuanian Commonwealth

The złoty is a traditional Polish currency unit dating back to the Middle Ages. Initially, in the 14th and 15th centuries the name was used for all kinds of foreign golden coins used in Poland, most notably German and Ruthenian ducats. In 1496 the Sejm approved the creation of a national currency and its value was set at 30 Prague groschen, later converted to local Polish term grosz.

It was not the only currency in use and the name was used for the 30 groszy coin called the Polish golden (polski złoty), as opposed to the Red golden - czerwony złoty or Rhine golden - złoty reński, also in circulation at the time. However, with time and parity drop the real value of Polish złoty dropped slightly to the level of foreign coins. That was when a fixed rate of 1 złoty polski to 30 grosz (sometimes referred to as florin) and 1 foreign ducat (dubbed złoty czerwony or red złoty) to ca. 5 Polish złoty's.

Following the monetary reform carried out by King Stanisław August Poniatowski, the złoty became Poland's official currency and its exchange rate of 1 zł to 30 gr was confirmed. Until 1787, the złoty was tied to the Conventionsthaler of the Holy Roman Empire, with 8 złoty equal to one Conventionsthaler. Two debasements of the currency occurred in the years before the final partition of Poland.

Złoty in the Duchy of Warsaw

The złoty remained in circulation after the Partitions of Poland and the Duchy of Warsaw issued coins denominated in grosz, złoty and Talar, worth 6 złoty. Talar banknotes were also issued.

Złoty in the Congress Kingdom 1815-1850

The Warsaw mint issued złoty until 1841, with a fixed exchange rate between the Polish and Russian currencies of 1 kopeck = 2 grosz, or 0.15 ruble = 1 złoty. The Polish monetary system was banned by the Russians following the failed January Uprising. However, the golden coins remained in use until the early 20th century, much like other golden coins of the epoch, most notably golden roubles (dubbed świnka, or piggy) and golden pounds. During this period, the Republic of Kraków also issued a currency, the Kraków złoty.

Ruble and Marka 1850-1924

The Russian ruble circulated in Poland from 1850 until 1917, when it was replaced by the marka, a currency initially equivalent to the German mark.

Złoty, 1924-1939

The złoty was reintroduced as Poland's currency by Władysław Grabski in 1924, following the hyperinflation and monetary chaos of the years after World War I. It replaced the marka at a rate of 1 złoty = 1,800,000 marek and was subdivided into 100 groszy (from German groschen, the subunit used in Austria). The złoty was pegged at 0.1687 grams pure gold. 1 1939 złoty = 8 2004 złoty.

Złoty of General Government, 1939-1944

On December 15, 1939, the new Bank Emisyjny was established by the General Government, itself set up by Nazi Germany. In May 1940, old banknotes of 1924-1939 were stamped by the new entity. The money exchange was limited per individual, the limits varied according to the status of the person (Pole, Jew, etc.). The fixed exchange rate 2 Złote = 1 Reichsmark was established. A new issue of notes appeared in 1941. The General Government also issued coins using similar designs to earlier types but with cheaper metals.

Post-War Złoty, 1944-1950

New Złoty banknotes were introduced after July 22, 1944 by the Narodowy Bank. They circulated until 1950.

Złoty PLZ, 1950-1994

In 1950, a new złoty was introduced, replacing all earlier issues at a rate of one hundred to one. The new banknotes were dated 1948, whilst the new coins were dated 1949. Coins were first issued in denominations of 1, 2, 5, 10, 20 and 50 groszy and 1 złoty, with later issues of 2, 5, 10, 20, 50 and 100 złotych. Banknotes were first issued in denominations of 2, 5, 10, 20, 50, 100, 500 and 1000 złotych. 200 and 2000 złotych notes were added in the 1970s and 5000 złotych notes appeared in 1982. The late 1980s and early 1990s saw high inflation in Poland and lead to the issue of notes in denominations of 10,000, 20,000, 50,000, 100,000, 200,000, 500,000, 1,000,000 and 2,000,000 złotych.

From 1 January, 1990 it was a convertible currency.

Between 1950 and 1990, a unit known as the Złoty dewizowy was used as an artificial currency for calculation purposes only.

New Złoty (PLN)

The New Polish Złoty is the unofficial name of the current currency of Poland, introduced on January 1, 1995 as a result of the devaluation of the old currency. The official name of the Polish currency did not change since the Polish currency law of 1950 (DZ.U nr 50. poz. 459 with later changes), which defines the official currency as the Złoty, remains in effect. The devaluation rate was 10,000 Polish Złoty to 1 New Polish Złoty. The issuing bank is the Narodowy Bank Polski.

Coins and banknotes

Coins include 1 grosz, 2 grosze, 5 groszy, 10 groszy, 20 groszy, 50 groszy, 1 złoty, 2 złote, and 5 złotych, while banknotes include 10, 20, 50, 100, and 200 złotych.

Future

Poland's accession to the European Union (in May 2004) means that the country is obliged to eventually adopt the euro, though not immediately. The introduction of the euro is unlikely before 2010 (according to Standard & Poor's analysis), and certain conditions could further delay introduction. The Polish government stated (in June 2004) that it would like to join the euro in 2008, this forecast mainly being made due to Poland's recent strong quarterly GDP growth and the reduction of the budget deficit. The złoty remains as the official currency for the foreseeable future, with the euro acting in a secondary role.

External links

Currencies of Poland

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