Polish złoty

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Not to be confused with Zloți.
Polish złoty
Polski złoty  (Polish)
200zl r.jpg Polish 5-Zloty coin (1994).gif
200-złotych banknote obverse (1994 series) 5-złotych coin obverse
ISO 4217
Code PLN
1100 Grosz
Plural The language(s) of this currency belong(s) to the Slavic languages. There is more than one way to construct plural forms.
 Grosz gr
Banknotes 10zł, 20zł, 50zł, 100zł, 200zł
Coins 1gr, 2gr, 5gr, 10gr, 20gr, 50gr, 1zł, 2zł, 5zł
User(s) Poland
Central bank National Bank of Poland
 Website www.nbp.pl
Mint Mennica Polska
 Website www.mennica.com.pl
Inflation −0.9%
 Source [1] (July 2016)

The złoty (pronounced [ˈzwɔtɨ];[2] sign: ; code: PLN), which literally means "golden", is the currency of Poland. The modern złoty is subdivided into 100 groszy (singular: grosz; alternative plural form: grosze). The recognized English form of the word is zloty, plural zloty or zlotys.[3] The currency sign, zł, is composed of the Polish lower-case letters z and ł (Unicode: U+007A z LATIN SMALL LETTER Z & U+0142 ł LATIN SMALL LETTER L WITH STROKE).

As a result of inflation in the early 1990s, the currency underwent redenomination. Thus, on January 1, 1995, 10,000 old złotych (PLZ) became one new złoty (PLN). Since then, the currency has been relatively stable, with an exchange rate fluctuating between 2 and 4.5 złoty for a United States dollar.

Before the złoty[edit]

The predecessors of the złoty were the Polish mark (grzywna) and a kopa. Grzywna was a currency that was equivalent to approximately 210 g of silver, in the 11th century. It was used until sometime in the 14th century, when it gave way to the Kraków grzywna (approximately 198 g of silver). At the same time, first as the complement to grzywna, and then as the main currency, came a grosz and a kopa. Poland made grosz as the imitation of the Prague groschen; the idea of kopa came from the Czechs as well. A grzywna was worth 48 groszy; a kopa cost 60 groszy.[4][5][6]

First złoty[edit]

Kingdom of Poland and Polish–Lithuanian Commonwealth[edit]

The złoty (golden) is a traditional Polish currency unit dating back to the late Middle Ages. Initially, in the 14th and 15th centuries, the name was used for all kinds of foreign gold coins used in Poland, most notably Venetian and Hungarian ducats, (however, in Ukraine, Volyn and Galicia, the name for them were the золотий(golden)).[7] One złoty at the very beginning of their introduction cost 12–14 groszy; however, groszy had less and less silver as time passed. In 1496 the Sejm approved the creation of a national currency, the złoty, and its value was set at 30 groszy, a coin minted since 1347 and modelled on the Prague groschen, and a ducat (florin), whose value was 1 12 złoty.[8] The 1:30 proportion stayed (12 of a kopa), but the grosz became cheaper and cheaper, because the proportion of silver in the coin alloy diminished by time. In the beginning of the 16th century, 1 złoty was worth 32 groszy; by the middle of the same century it was 50 groszy;[9] by the reign of Sigismund III Vasa 1 złoty was worth 90 groszy, while a ducat was worth 180 groszy.

The name złoty (sometimes referred to as the florin) was used for a number of different coins, including the 30-groszy coin called the polski złoty, the czerwony złoty (red złoty) and the złoty reński (the Rhine guilder), which were in circulation at the time. However, the value of the Polish złoty dropped over time relative to these foreign coins, and it became a silver coin, with the foreign ducats eventually circulating at approximately 5 złotych.

The matters were complicated by the extremely intricate system of coins, with denominations as low as  13 groszy and as high as 12,960 groszy fit into one coin. There were no usual decimal denominations we use today: the system used 4, 6, 8, 9 and 18 groszy, which are not common now at all. Moreover, there was no central mint, and, apart from Warsaw mint, there were the Gdańsk, Elbląg and Kurland (Riga) separate mints which did not produce the same denomination coins with the same materials. For example, szeląg had 1.3 g of copper while minted in either Kraków or Warsaw, but the local Gdańsk and Elbląg mints made it using only 0.63 g of copper. This facilitated forgeries and wreaked havoc in the Polish monetary system

Following the monetary reform carried out by King Stanisław August Poniatowski which aimed to simplify the system, the złoty became Poland's official currency and the exchange rate of 1 złoty to 30 groszy was confirmed. The king established the system which was based on the Cologne mark (233.855 g of pure silver). Each mark was divided into 10 Conventionsthaler of the Holy Roman Empire, and 1 thaler was worth 8 złotych (consequently, 1 złoty was worth 4 grosze. The system was in place until 1787. Two devaluations of the currency occurred in the years before the final partition of Poland.

After the third partition of Poland, the name złoty existed only in Austrian and Russian lands. Prussia had introduced the mark instead.

5 Zlotych, first issue of 1794
10 Zlotych, first issue of 1794
25 Zlotych, first issue of 1794
50 Zlotych, first issue of 1794
100 Zlotych, first issue of 1794
500 Zlotych, first issue of 1794
1,000 Zlotych, first issue of 1794
The Polish–Lithuanian Commonwealth first issued złoty banknotes on 8 June 1794 under the authority of Tadeusz Kościuszko. The 5, 10, 25, 50, 100, 500 and 1,000 złotych are depicted above. The latter two are very rare.

The Kościuszko Insurrection and Russian part of Poland until 1807[edit]

On 8 June 1794 the decision of the Polish Supreme Council offered to make the new banknotes as well as the coins. 13 August 1794 was the date when the złoty banknotes were released to public. At the day there was more than 6.65 million złotych given out by the rebels. There were banknotes with the denomination of 5, 10, 25, 50, 100, 500 and 1,000 złotych (dated as of 8 June 1794), as well as 5 and 10 groszy, and 1 and 4 złoty coins (later banknotes, dated as of 13 August of the same year). Here is the table with the issuance of the Kościuszko banknotes:

Denomination Amount printed Value in 1794 Polish złoty
5 gr. miedziane(copper groszy) 800 526 133 421
10 gr. miedziane(copper groszy) 377 028 125 676
1 zł 11 920 11 920
4 zł 990 730 3 962 920
5 zł 59 400 297 000
10 zł 46 500 465 000
25 zł 35 000 875 000
50 zł 36 700 1 835 000
100 zł 19 300 1 930 000
500 zł 500 250 000
1 000 zł 1 000 1 000 000
Total: 2,378,604 10,885,937 zł
The Polish–Lithuanian Commonwealth also issued banknotes of smaller denomiations, under the authority of Tadeusz Kościuszko. There are 5, 10 gr(1zł=30gr), 1 and 4 zł.

However, it did not last for long: on 8 November, Warsaw was already held by Russia. Russians discarded all the banknotes and declared them invalid. Russian coins and banknotes replaced the Kościuszko banknotes, but the division on złote and grosze stayed. This can be explained by the fact the Polish monetary system, even in the deep crisis, was better than the Russian stable one, as Poland used the silver standard for coins. That is why Mikhail Speransky offered to come to silver monometalism ("count on the silver ruble") in his work План финансов (Financial Plans, 1810) in Russia. He argued that: "... at the same time ... forbid any other account in Livonia and Poland, and this is the only way to unify the financial system of these provinces in the Russian system, and as well they will stop, at least, the damage that pulls back our finances for so long."

Duchy of Warsaw[edit]

The złoty remained in circulation after the Partitions of Poland and the Duchy of Warsaw issued coins denominated in grosz, złoty and talar (plurals talary and talarów), worth 6 złoty. Talar banknotes were also issued. In 1813, while Zamość was under siege, Zamość authorities issued 6 grosze and 2 złote coins.

Congress Poland[edit]

Models of Polish coins under the reign of Alexander I

On 19 November O.S. (1 December N.S.) 1815, the law regarding the monetary system of Congress Poland (in Russia) was passed, according to which the złoty stayed, but there was a fixed ratio of the ruble to the złoty: 1 złoty was worth 15 silver groszy, while 1 grosz was worth 12 silver kopeck. From 1816, the złoty started being issued by the Warsaw mint, denominated in grosze and złote in the Polish language, as well as the portrait of Alexander I and/or the Russian Empire's coat of arms:

  • 1 and 3 grosze made from copper;(1815–49);
  • 5 and 10 groszy out of billon;(1816–55);
  • 1, 2, 5 and 10 złotych out of silver;(1816–55);
  • 25 (the so-called złoty pojedyńczy, single złoty) and 50 (złoty podwójny; double złoty) złotych out of gold (1817–34).

At the same time kopecks were permitted to be circulated in Congress Poland. In fact foreign coins circulated (of the Austrian Empire and Prussia), and the Polish złoty itself was effectively a foreign currency. The coins were as well used in the western part of the Russian Empire, legally from 1827 (decision of the State Council).

In 1828 the Polish mint was allowed to print banknotes of denominations of 5, 10, 50, 100, 500 and 1,000 złotych, on the condition of their guaranteed exchange for coins at the will of Saint Petersburg. That meant that there should have been silver coins that had the value of 17 of banknotes in circulation.

November Uprising[edit]

5 złotych from the November Uprising of 1830-1831

At the time of the November Uprising, the rebels released their own "rebellion money" – the golden ducats and silver coins of the denomination of 2 and 5 złotych, with the revolutionary coat of arms, and the copper 3 and 10 groszy. The 1-złoty coin was as well released as a trial coin. The Polish bank, under the control of the rebels, having few precious metal resources in the reserves, released the 1 złoty banknote. They released the 5, 50 and 100 zł banknotes as well, all yellow. By August 1831 735 thousand złotych were released as banknotes. After the defeat of the uprising the decisions from 21 November (3 December) and 18 (30) December cancelled all the uprising monetary politics. All the coins were to be replaced by Russian coins, but it took a long time till the currency was circulating – only in 1838 was the usage of rebel money banned.

The last years of the first złoty of Congress Poland[edit]

At the same time the question arose about the future of the Polish złoty, as well as drastically limiting Polish banking autonomy. Russian finance minister Georg von Cancrin suggested to "value everything in rubles, not florins [złoty]".

There was a problem, however. The monetary system in the Russian Empire was still severely unbalanced. Banknotes, for example, cost much less to produce than their denomination. For that reason, the decision was taken to show both currencies on coins, which was a rather mild punishment for the November Uprising. From 1832 on the Petersburg and Warsaw mints decided to start minting new double-denominated coins. The exchange rate was 1 złoty to 15 kopecks.

In 1841 the main currency of Congress Poland became the Russian ruble.

From 1842, the Warsaw mint already issued regular-type Russian coins along with some coins denominated in both groszy and kopecks. At that time the złoty-to-ruble ratio changed again: 1 ruble was now worth only 2 złote.

The Warsaw mint still issued three coin types: double currency coins (up to 1850), złote and grosze (up to 1865), and the Russian Empire standard coins till 1865. From 1865 the Warsaw mint stopped making coins, and on 1 January 1868 the Warsaw mint was abolished.

The banknotes were changed much faster, as no Polish banknote was in circulation (at least officially). The Polish Bank started issuing Russian banknotes, denominated only in rubles and valid only in Congress Poland. At the same time the national credit banknotes, made in St. Petersburg, could be used everywhere in the Empire as usual Russian banknotes, as well in Poland.

The Free City of Kraków złoty[edit]

1 złoty, released in Kraków in 1835
Main article: Kraków złoty

Between 1835 and 1846, the Free City of Kraków also used a currency, the Kraków złoty, with the coins actually being made in Vienna. There were 5 and 10 groszy coins and 1 złoty coins. They were all the same: the obverse had the coat of arms and the writing: WOLNE MIASTO KRAKÓW ("Free City of Krakow"), the reverse had the nominal and the year of production.

Poland without the złoty[edit]

10 Polish marks, 1917

From 1850, the only currency issued for use in Congress Poland was the ruble consisting of Russian currency and notes of the Bank Polski. The monetary system of Congress Poland was unified with that of the Russian Empire following the failed January Uprising in 1863. However, the gold coins remained in use until the early 20th century, much like other gold coins of the era, most notably gold rubles (dubbed świnka, or "piggy") and sovereigns. Following the occupation of Congress Poland by Germany during World War I in 1917, the ruble was replaced by the marka (plurals marki and marek), a currency initially equivalent to the German Papiermark.

Polish currency in 1918–24[edit]

Main article: Polish marka

New Poland started releasing new currency – Polish marks, after the defeat of the German Empire and Austro-Hungary. The first banknotes had either Tadeusz Kościuszko (5, 10, 100, 1000 marks) or Queen Jadwiga (10 and 500 marks). 1 and 20 marks also circulated, but they showed nobody on the banknotes.

The Polish marka was extremely unstable because of the constant wars with its neighbours. Attempts to reduce the expenditures of Polish budget were vain – all the money gained went to conduct war with the USSR. To complicate the matters, those attempts did not please the elite, which ruled the country. The government's actions were not popular at all, so the taxes did not rise significantly, so not to gain resent from people. Even worse, the territories that made up Poland were rightly coined "the country of three parts", as each part of Poland developed differently during the 123 years after Stanisław Poniatowski's abdication, with post-Prussian territories the best developed, and Galicia and Kresy the worst.

The last attempt to save the Polish marka was made in 1921, when Jerzy Michalski made out his own plan to raise taxes and shorten expenditures. The Sejm accepted it, but made a lot of corrections. The realisation of that plan did not succeed, and it had only short-term influence.

This disrupted the whole economy of Poland, and galloping inflation began. The 12 marek and 5,000 marek banknotes became worthless in two years. As hyperinflation progressed, Poland came to print 1, 5 and 10 million mark banknotes. However, they were not worth much. 10 million marks cost only US$1,073 in January 1924. Some immediate action had to be taken. Władysław Grabski was invited to stop the pending hyperinflation. The second Polish złoty was created.

Second złoty[edit]

Władysław Grabski monetary reform[edit]

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, instead of 30 groszy, as it was earlier. 1 złoty was worth 0.2903 grams of gold, and 1 US dollar cost 5.18 złotych. New coins had to be introduced, but it was not immediately. The temporary solution of the problem was ingenious. A 500,000 mark banknote was cut in two, and on each side there were overstamps that showed these were 1 grosz "coins". The same happened with the 10,000,000 marks, to make 2 "coins" worth 5 groszy. This was not suitable at all, but somehow, people had to get at least some money.

Transition to złoty[edit]

When second złoty was created, it was pegged to the US dollar. The Sejm was a weak institution when it came to the financial control in the country. Parties demanded the government to spend more money, which was not foreseen in the budget.

The deficite in the budget occurred, and inflation was at the brink of coming out of control. The government tried with all efforts to cut the expenditures, and it often came into conflict with the Sejm. However, the government didn't allow the hyperinflation come again. To achieve that, the government made an emission of securities, which went along with the temporary "bilety zdawkowe", coins and złoty banknotes printed in 1919.

By the end of 1925 the Polish government couldn't pay off the released securities. The economy of Poland was at the brink of crack.

86. Regiment of Infantry's 1 złoty coin from Mołodeczno

Even though, Grabski refused to receive foreign help, because he was afraid Poland would become dependent from the League of Nations. The Polish PM thought that as soon as złoty would become stable, the foreign creditors would give credits and investments on more favourable conditions than were proposed at that time. However, the lack of trust in the Polish economy had made these thoughts impossible.

Because of Grabski's position, Poland was trying to attract foreign investors. His government was forced to sell some country's property on unfavourable conditions, without any significant effects. In total, złoty has become 50% cheaper than it was in 1923, Grabski resigned from his post, however, the hyperinflation was averted.

Problems further occurred in Poland's economy, especially because of the 1920 social protection act. It was now evident that the system can't work anymore. The apogeum of the crisis came in November 1925. PPS demanded to make a so-called sanation. On 14 November 1925 Piłsudski claimed he was disturbed by such a crisis.

Piłsudski's reforms[edit]

In May 1926 a coup d'état was made, which resulted in Piłsudski becoming the authoritarian leader of Poland. Almost immediately the budget was stabilized. The tax incomes rose significantly, a credit was taken from the USA, and the Bank of Poland's policy was now more strongly controlled by the government. That stopped the Polish economy's deterioration.

As it was earlier in the case with Austria and Hungary, a special monitoring commission arrived in Poland to analize the economic situation. The head of the commission was E. Kemmerer, the American professor.

Złoty, which started to devaluate in 1925, started to stabilize the next year (mainly thanks to significant exports of coal), and was set on the dollar-złoty rate 50% higher than in 1924. Up to 1933 złoty was freely exchanged into gold and foreign currencies. Polish government has made the conclusions from the previous years, so the golden standard of złoty was introduced.

In 1924–1925 there was a big outflow of capital from the banks, but 1926 saw people investing actively in the banks. As said earlier, the main factor that made the economic progress was the increased demand for coal. However, in 1927 the economic growth was slowed down because of overrated złoty. As a result, the coal was too expensive, and the amount of bought coal diminished, while import became cheaper than export, and the trade balance turned to negative. Again, Poland plunged into crisis. In total, the economic growth in years 1926 to 1929 was not strongly felt. The main reason for that was the decline of industry, which was inflicted by the decline of the demand for Polish items. The crisis lasted until the mid-30s. It was deepened by the Great Crisis of 1929–1932.

Polish złoty in 1930s[edit]

As Poland entered another economical crisis, the government took action to remove the budget deficit by cutting the expenses again that did not concern the army. Even though a third of expenses was reduced, deficit persisted. The capital in Poland from taxpayers that should have been leading the country out of crisis was spent instead to pay out the debt burden. Some of the money necessary for the economy was given out by the government to creditors and foreign banks. To further cut the expenses Poland had to import less and export more. The tariffs were risen again for foreign products, while subsidies were given to exporters.

In 1935 Piłusdski died, and the power came to the generals. They were very disturbed by the crisis. Poland was yet an agarian country (61% of population in 1931). To reform the economy, the government was thinking about further intervention. As a result, Poland nationalized the industry in 1935–1939, starting the work communists ended later. The amount of produced goods exceeded the expectations in the state-owned factories. The result was instant - the economy stabilized, there were no fears for further devaluation of złoty, and rapid growth was seen. However, the World War II ended all the prosperity abruptly. The government had to flee from Germans. Already in emigration, the government released new banknotes of the denomination of 1, 2, 5, 10, 20, 50, 100 and 500 złotych which were dated by 15 or 20 August 1939 and were mostly cyan(with the exception of 1, 2 and 10 złotych). Those were printed in the USA.

Commemorative coins of the Second Polish Republic[edit]

General Government[edit]

When Germans created the General Government, the first thing about the paper money they started doing was withdrawing the 100 złotych banknotes from 1932 and 1934 and 500 złotych banknotes from 1919. The banknotes had to be accounted on the deposits of the people who gave them to the bank.

1 złoty bilet zdawkowy, issued in Będzin at the beginning of Nazi occupation

The 100 złotych banknotes were overstamped with a red inscription: "Generalgouvernement / für die besetzen polnischen Gebiete"(The General Government / for the occupied territories). It was massively counterfeited.

A little later the bank division of the Główny Zarząd Kas Kredytowych Rzeszy Niemieckiej was organized. It started to print the Reichsmarks, but later, on December 15, 1939, a decision came to create the new Bank Emisyjny in Kraków, as the Bank Polski officials urgently fled to Paris. It started working on 8 April 1940.

In May 1940, old banknotes of 1924–1939 were overstamped by the new entity. Money exchange was limited per individual; the limits varied according to the status of the person (Pole, Jew, etc.).[citation needed] The fixed exchange rate 1 Reichsmark = 2 złote was established. A new issue of notes appeared in 1940-41. The General Government also issued coins (1, 5, 10 and 20 groszy in zinc, 50 groszy in nickel-plated iron or iron), using similar designs to earlier types but with cheaper metals(mainly zinc-copper alloy). 1, 5, 10 and 20 groszy coins were dated 1923 and 50 groszy were dated 1938.

Banknotes were also issued, called unofficially "młynarki"(from the name of President Feliks Młynarski) or "krakowiaki"(from the place of release), in the denominations of 1, 5, 10, 20, 50, 100 and 500 złotych. 1000 złotych did not come into public circualtion at all, and only reconstructions survived(although shown below). The total amount of them was approximately 10,183,000,000 złotych. Additional 20 millions were manufactured by the conspiratory typography of the Union of Armed Struggle. From summer 1943 Armia Krajowa received the złote made by the Great Britain.

Communist Poland(1945-1950)[edit]

The advance of the Red Army meant the transition to socialism, Poland being no exception.

The first monetary reform of post-war Poland was conducted in 1944, when the first series of banknotes of communist Poland were released. This was necessary for the creation of the new country(even the Communist one), so the Polish Committee of National Liberation signed an act on 24 August 1944 introducing the banknotes. The older General Government banknotes were exchanged at par with the new ones. There were limits, however – 500 złotych only for an individual and 2000 złotych for the private enterprises and small manufacturers. The rest came onto the blocked bank accounts.

The banknotes had a very simple design, with no people neither buildings featured. They featured the name of yet uncreated Narodowy Bank Polski(the National Bank of Poland). The banknotes were printed in Moscow in the Goznak mint. While printing, all the banknotes of the series I(except for the 50 groszy, and 1000 złotych, which were released only later) had a faulty inscription, containing a russianism.

On 15 January 1945 the National Bank of Poland was created. Its first monetary action was the printing of 1000 złotych banknote in the newly built Polska Wytwórnia Papierów Wartościowych in Łódź. The first Communist series' banknotes were easy to counterfeit, so additional banknotes were printed in 1946–48. As 500 złotych banknote was very easy to counterfeit, it was withdrawn in 1946.

The new(II and III) series was created by the graphics Ryszard Kleczewski and Wacław Borowski.

These hadn't lasted long, however. The IV series banknotes was the series used for long after; all the previous ones, mainly because of the underdeveloped security features, were taken out of circulation according to the act signed on 28 October 1950, which gave way to the new Polish złoty(PLZ). The older banknotes had to be exchanged in 8 days' time onto the newer banknotes of series IV, which were prepared in big mystery.

About in the same time, new coins were introduced, which were in circulation for more than 40 years.

Third złoty[edit]

In 1950, a new złoty (PLZ) was introduced, replacing all earlier banknote issues(before 1948) at a rate of one hundred to one, while all the bank assets were senominated in the ratio 100:3. The new banknotes were dated 1948, while the new coins 1949. Initially by law from 1950 1 złoty (zł) was equal 0.222168 g of pure gold(see also Dziennik Ustaw 50, 459).

At the same time the following happened in Poland:

Poland, as all the Warsaw Bloc countries, were nationalizing most or all of the enterprises. The needed act for nationalizing was signed in 1946. In the meantime, farmers(yet the main source of Polish income) received additional lands from the government(confiscated from the church or rich people, as well from farmers which did not obey the new rule). The state also received lands, and conducted the collectivisation process on them.

The major businesses were nationalized, however, the smaller enterprises were yet in the private hands, in contrast to the USSR. However, the whole economy was under firm state control.

In the late 1940s, Polish złoty was not very stable, as a lot of opponents were fought at the time, meaning the constant arm struggle, which didn't make the already hard situation any better. The złoty only stabilized in 1948-9.

From 1950, Poland started implying the collectivization doctrine on a mass scale. A lot of farmers came to the newly created PGRs (State Agricultural Farms), others gave food to the state, which introduced the obligatory food deliveries(first of cereals, in 1951; from the next year on, of meat, potatoes and milk). The individually-run farms were quickly ruined, because the state bought the products for an extremely low price, much lower than on market. The agriculture might have been state in a few years if not the death of Bolesław Bierut.

When the new government came with Władysław Gomułka in head, it went on to ease the hardcore Communist policy of earlier years. State Farms were reformed, the obligatory deliveries diminished, and state buying prices risen. However, the situation was not much different from one in 1949, in fact. Industry was state-owned, while agriculture was mostly private.

Serious reforms were proposed in early 1970s by Edward Gierek, aimed to upgrade the situation of the normal people. Unfortunately, the government had no money to conduct these reforms. That is why it started taking debts from USSR and other Warsaw Bloc countries, motivating the decision by the following phrase: "The investments will upgrade the Poland's potential, which will be aimed in export, so that the country will pay the interests and at the same time maintain a high industrial production". In fact, the intention was good, as it could create workplaces, but it never happened. The debt burden taken was too big for Poland. That was the main reason of the further financial crisis. After a period of prosperity in 1971-8, Poland entered into a very deep regression, which worsened over time as Poland was unable to pay out the interest rates. The crisis lasted until 1994.

The first sign of the crisis was seen in mid-70s, when Polish złoty suddenly came under rampant inflation. However, it was shortly stopped. It was a matter of time the devaluation continued. It did.

Financial crisis of 1980s[edit]

In 1980, the next wave of devaluation came onto the Polish złoty. Edward Gierek, who himself was worried about the state of affairs, had his government accused of corruption. He was removed from the Presidency in the same year.

The first big strikes started in Gdańsk and GOP(Upper Silezian Industrial Area). These hampered production in the main economical sector - industry. The situation was worsened by the previous period of prosperity, which increased consumption. As people suddenly started receiving less money, they bought less, and the government was forced either to lower the salaries or to make workers redundant. This accelerated the crisis. Moreover, the demand was more diminished, as the government provided food reglamentation. The martial law of 1981–83 deepened the crisis.

The economical situation was no good. The inflation in Poland was rampant – over 100% per annum in 1982. It was halted in the mid-80s(15% per annum), but again started in late-80s. 5000 złotych were introduced in 1982, 10,000 złotych in 1988, 20,000 and 50,000 złotych in 1989, and 100,000, 200,000 and 500,000 złotych in 1990. The grosz coins were rendered irrelevant, and coins were mostly made out of aluminium (with the exception of the commemorative ones).

The economical situation did not allow any salary and pension rising because of the huge debt burden, which doubled in the 1980s, and was admitted impossible to handle already in 1981. Trying to escape such situation, Poland started massively printing banknotes, without any covering from the bank resources.

In that case, the only way out of the crisis was the liberization of the economy. In 1988 Mieczysław Rakowski was forced to accept the possibility of transition of the state enterprises into private hands. In fact, as said earlier, smaller enterprises were private, and 18% of GDP was made by private sector, additional 10% – by the cooperatives. These were not, however, the Perestroika cooperatives, but once with limited, but yet experience in the market economy. These were ready to transfer to market economy.

Communists had to admit they had no grip on the economy, which was another reason to reason to conduct some changes.

Leszek Balcerowicz was behind the idea of shifting the economy from state-based to free-trade one. To achieve this, the next was introduced:

  • Liberalization of prices. This caused very high inflation in Poland (585.5% per annum in 1990 alone);
  • Permission of the state to give access to all areas of economical enterprise (January 1989 - January 1990);
  • New budget cuts on the state-owned enterprises and lowering the tempo of inflation to normal economy level with the help of new financing and credit policies as well as attraction of direct investments;
  • Measures to increase the convertibility of the national currency in all operations;
  • Liquidation of foreign trade control(1990).

The worst years of the crisis started in 1988, when the level of inflation rose higher than 60% per annum. Rampant inflation peaked in 1990, when it exceeded 1000% per annum. It can be called hyperinflation, as the monthly inflation rate was higher than 50%. However, it was not for very long, and the rampant inflation was hampered. In mid-December 1991 it decreased below 60% per annum, and by 1993 it firmly established below 40%, which is the acceptable inflation rate for an economy. As the rate was lowering by the time, złoty gained confidence from foreign investors, and the only issue left was the redenomination of the depreciated złoty.

Polish złoty coins (PLZ)[edit]

Normal coins[edit]

In 1949, coins in the denominations of 1, 2, 5, 10, 20, 50 groszy and 1 złoty were issued. The first two denominations were minted only in 1949, the rest also later.

In 1952, the name of Poland was changed to "People's Republic of Poland" instead of the "Republic of Poland". Coins made in 1949 featured the latter name, and only the 5 groszy brass coin was withdrawn in 1956. The rest circulated until 1994.

The 2, 5 and 10 złotych banknotes were withdrawn in 1960s to be exchanged by coins.

The denominations from 1 grosz to 2 złote were quite simple but the 5, 10 and 20 złotych coins featured people(5 złotych had a fisher, 10 złotych had Copernicus, Mickiewicz and Prus on its obverse, and 20 złotych, most notably, Marceli Nowotko), until 1980s. As the Polish złoty became cheaper over time, older coins were rendered priceless(however, they stayed in circulation), and the simple new coins were released only in złote denominations. All the PRP and 1990 issueoins were withdrawn in 1994, as a result of the monetary reform conducted at that time.

Commemorative coins[edit]

Polish złoty banknotes (PLZ)[edit]

Normal złoty[edit]

The banknotes issued in 1948 were already stable version. They were taken out of circulation in 1978 completely.

From 1974 the new banknotes from the "The Great Polish people", already the fifth version of these, were issued. These, however, lost their values quite quickly. New denominations were printed quickly.

In 1982, the 10 and 20 złotych banknotes were released instead of billon.

The last banknote released in Polish People's Republic was 200,000 złotych note, issued on 1 December 1989, which, because of insufficient security features, was drawn out of circulation. Since the 27 December 1989 the banknotes were issued in the "Rzeczpospolita Polska", already not "Ludowa", so the name was changed on the banknotes, and on the versions from 1990 on, the coat of arms were already as today's(with a crown).

All the banknotes of the series were redenominated at a rate of 10,000 PLZ to 1 PLN(new złoty). All the denominations were legal tender until the date of withdrawal, and were exchangeable onto the PLN until the date of lapse. After 31 December 2010, no PLZ banknote can be exchanged into PLN.

From 50,000 PLZ on, there were two versions released: the older ones(dated differently) and the newer ones(all dated 16 November 1993). The older ones had poorer security features than the new ones, the denominations in the new ones were red which shone in UV instead of gray-blue(which did not). The older ones lapsed on 15 October 1994, while the new ones lapsed as the smaller denominations did.

Złoty dewizowy[edit]

A traveller cheque, one of the types of "złoty dewizowy"

Between 1950 and 1990, a unit known as the złoty dewizowy (which can be roughly translated as the "foreign exchange złoty") was used as an artificial currency for calculation purposes only. It existed because at the time the złoty was not convertible(as most of the currencies in the Warsaw Bloc countries) and its official rate of exchange was set by the Government, and there existed several exchange rates depending on the purpose of the transaction and who was exchanging, i.e., a given amount in złoty could be exchanged for, say, US dollars at one of several official exchange rates depending on what was to be bought for the hard currency and the company that was buying foreign exchange; it worked similarly when a company had some earnings in Western currency and wanted (or needed) to convert them into złote. The exchange rate did not depend on the amount being converted. Visitors from countries outside of the Soviet Bloc were offered a particularly poor exchange rate. Concurrently, the private black-market exchange rate contrasted sharply with the official government exchange rate until the end of communist rule in 1989 when official rates were tied to market rates.

There were special banknotes, denominated in cents and dollars(as the US dollar), which were legal tender only for goods imported to Poland. They were issued by two authorities only: Pekao S.A.(from 1 cent to $100) and Baltona(from 1979, 1 cent to $20)

From January 1, 1990, Polish złoty became a fully convertible currency, with market-set and not state-set rates to foreign currencies.

Fourth złoty[edit]

Normal coins and banknotes[edit]

Already on 17 July 1990 Władysław Baka(the then head of the National Bank of Poland) claimed that works upon złoty denomination will start soon. At the same time coins of the PLN were minted(dated 1990-1994), and released into circulation in 1995. This has influenced the further process of money exchange in 1995, as exchanging low-value banknotes became considerably easy.

The banknotes were a bigger problem, however. In 1990, a new series of banknotes, created by Waldemar Andrzejewski, was proposed, but failed to be accepted due to its weak protection against counterfeiting. They are shown below (from 1 to 500 zł). Higher denominations(100 zł and higher) mostly focused on the Greater Poland cities. There were also 1,000 and 2,000 zł banknotes ready to be issued(which means that in 1990 the denomination planned would set an exchange rate at 1 new zloty to 1000 old zlotys.), with Kalisz and Biskupin. However, these denominations were not even sampled (as the lower-denominated banknotes).

At the same time, to conduct redenomination, the inflation had to be stable and below 10% per annum. Balcerowicz plan helped very much to achieve that in four years' time. On 11 May 1994 the Economical Committee of the Council of Ministers accepted the denominalization project from the NBP. The act allowing the project to come into force was ratified on 7 July 1994(Dziennik Ustaw Nr 84, 386).

At the same time, new banknotes were printed(dated 25 March 1994), which are still legal tender today. These feature the most prominent monarchs of the Rzeczpospolita. Their author is Andrzej Heidrich.

They were presented to public on the 21 November 1994. The next day on, the state television, the TVP, started showing the designs on TV sets, until the 1 January 1995.

Then the redenomination took place. 10,000 PLZ were worth 1 PLN. Nothing mattered where that money was, or who was it, as it was earlier at the denominations.

The new Polish złoty(PLN) started co-existing with the PLZ, for two years. All the prices had to be indicated in both PLZ and PLN. The priority was to take the low-denomination PLZ to exchange them on coins. On 31 December 1996, the PLZ was no longer legal tender. From that day on and up to the 31 December 2010, all the banknotes and coins of the PLZ had to be exchanged onto PLN in the NBP, its affiliations, or any bank. The sum for exchange had to be the multiple of 100 PLZ, which were worth 0.01 PLN. As of 31 December 2009 NBP estimates, 1,748,000,000,000 PLZ (178,400,000 PLN) were not yet exchanged.

However, there was one thing that did not change: the official name of the currency. The ISO 4217 code did, but the official law kept the point that the official name of the currency is the złoty. New Polish złoty is an unofficial way to address the Polish currency(Dziennik Ustaw nr 50, 459, with later changes).

The emission of zloty and grosz coins is shown in the table below:[15]

In 2012 new banknotes were printed, with added security features. They don't differ much from the first version banknotes(except for the 200 zł note), but can be recognized by the colour of the field where the watermark is on the obverse. In older banknotes, these are corresponding to the main colour, while they are white on the newer ones. Starting from 50 złotych, the new security features differ from those on the older banknotes. As well, newer banknotes have some randomly arranged dots, which are part of the EURion constellation.

500 złotych banknote will be also produced in this series.

Commemorative coins and banknotes[edit]

Poland releases commemorative banknotes since 2006. As of June 2016, eight were released.

There are also very many commemorative coins(enlisted below). These are legal tender in all payments, however, are not recommended to be used by the National Bank of Poland

Future of złoty[edit]

Conditions of Poland's joining the European Union (in May 2004) oblige the country to eventually adopt the euro, though not at any specific date and only after Poland meets the necessary stability criteria. Serious discussions of joining the Eurozone have ensued.[18][19][20] However, article 227[21] of the Constitution of the Republic of Poland will need to be amended first,[22] so it seems unlikely that Poland will adopt the euro before 2019.[23] Public opinion research by CBOS from March 2011 shows that 60% of Poles are against changing their currency. Only 32% of Poles want to adopt the euro, compared to 41% in April 2010.[24]

Exchange rates[edit]

1990 9500,00 12070,50 5864,19 16862,50 6884,05 65,45
1991 10584,26 13088,29 6378,62 18 652,81 7379,05 78,7235
1992 13630,12 17662,35 8761,51 24009,90 9742,76 107,7766
1993 18164,84 21204,91 10975,20 27274,86 12308,00 164,16
1994 22726,95 26913,49 14049,60 34772,23 16670,93 224,16
1995 2,4244 3,1358 1,6928 3,8257 2,0545 0,0258
1996 2,6965 3,3774 1,7920 4,2154 2,1826 0,0248
1997 3,2808 3,7055 1,8918 5,3751 2,2627 0,0272
1998 3,4937 3,9231 1,9888 5,7907 2,4149 0,0268
1999 3,9675 4,2270 2,1612 6,4197 2,6413 0,0350
2000 4,3464 4,0110 2,0508 6,5787 2,5747 0,0403
2001 4,0939 3,6685 end 1,9558 5,8971 2,4298 0,0337
2002 4,0795 3,8557 6,1293 2,6288 0,0329
2003 3,8889 4,3978 6,3570 2,8911 0,0339
2004 3,6540 4,5340 6,6904 2,9370 0,0337
2005 3,2348 4,0254 5,8833 2,5999 0,0294
2006 3,1025 3,8951 5,7116 2,4761 0,0266
2007 2,7667 3,7829 5,5310 2,3035 0,0235
2008 2,3708 3,4908 4,2200 2,2291 0,0234
2009 3,1175 4,3276 4,8563 2,8665 0,0333
2010 3,0179 3,9939 4,6587 2,8983 0,0345
2011 2,9636 4,1190 4,7463 3,3474 0,0373
2012 3,2581 4,1852 5,1605 3,4724 0,0409
2013 3,1608 4,1975 4,9437 3,4100 0,0324
2014 3,0315 4,1631 5,0167 3,3816 0,028778
2015 3,5725 4,3078 5,5296 3,5833 0,029671
2016 3,9011 4,2615 5,7862 3,9394 0,032411
Current PLN exchange rates

Name and plural forms[edit]

The name złoty is pronounced like zwoti [ˈzwɔtɨ]. There are two plural forms: złote (zwoteh [ˈzwɔtɛ]) and złotych (zwotikh [ˈzwɔtɨx]). The correct usage of the plural forms is as follows:

  • 1 złoty/grosz [ˈzwɔtɨ] / [ˈɡɾɔʂ]
  • 2…4; 22…24; 32…34 (…), 102…104, 122…124, 132…134, (…) złote/grosze [ˈzwɔtɛ] / [ˈɡɾɔʂɛ]
  • 0, 5…21; 25…31; 35…41 (…); 95…101; 105…121; 125…131; (…) złotych/groszy [ˈzwɔtɨx] / [ˈɡɾɔʂɨ]

The rules are the same for larger numbers, e.g. 1,000,000 złotych; 1,000,002 złote; 1,000,011 złotych; 1,000,024 złote. Fractions should be rendered with word złotego [zwɔˈtɛɡɔ] and grosza [ˈɡɾɔʂa], e.g. 0,1 złotego; 2,5 złotego, etc. It is customary in Poland to use space (non-breaking) for digit grouping (“thousands separator”) and comma for separating fractions from whole numbers; cf. decimal mark.

Here one can find general rules for declension of cardinal (among others) numerals in Polish: classes one, few, many and other for “złoty” are złoty, złote, złotych, złotego respectively and for “grosz” are grosz, grosze, groszy, grosza respectively.

See also[edit]


  1. ^ http://www.bankier.pl/gospodarka/wskazniki-makroekonomiczne/inflacja-rdr-pol
  2. ^ The nominative plural, used for numbers ending in 2, 3 and 4 (except those in 12, 13 and 14), is złote [ˈzwɔtɛ]; the genitive plural, used for all other numbers, is złotych [ˈzwɔtɨx]
  3. ^ American Heritage Dictionary of the English Language, 3rd ed., p. 2078.
  4. ^ НС 1980, «Копа».
  5. ^ НС 1980, «Гривна польская (марка)».
  6. ^ НС 1980, «Грош краковский (польский)».
  7. ^ СН 1993, «Золотой».
  8. ^ Рябцевич В. Н. (1995). "Глава VII. Денежное обращение Беларуси в конце XV — 2-й трети XVII века". Нумизматика Беларуси в конце 2-й трети XVII — середине 90-х гг. XVIII в. Мн.: Полымя. pp. 173, 687. ISBN 5-345-00737-3. 
  9. ^ НС 1980, «Злотый».
  10. ^ a b c d e f g h i j k "монеты 1-й Польской Республики 1923-1939 гг.(Coins of II Rzeczpospolita)". site coins.lave.ru. Archived from the original on 2012-01-26. Retrieved 2011-07-02. 
  11. ^ a b c d https://cenum.pl/katalog/Polska/II_RP/Obiegowe:10_zlotych/
  12. ^ a b "5 злотых 1936 г. яхта "Дар Поморья"". сайт ww2.ru. Archived from the original on 2012-01-26. Retrieved 2011-07-02. 
  13. ^ "5 злотых серии Ника". сайт coins.su/forum. Archived from the original on 2012-01-26. Retrieved 2011-07-02. 
  14. ^ "Narodowy Bank Polski". 
  15. ^ "Narodowy Bank Polski". 
  16. ^ Grupa Wirtualna Polska. "500 zł jednak powstanie. Jest deklaracja NBP". biztok.pl. 
  17. ^ The National Bank of Poland's Collector's Banknote page
  18. ^ "Poland may hold euro referendum in 2010-Deputy PM". Forbes. September 18, 2008. Archived from the original on March 8, 2010. Retrieved September 19, 2008. 
  19. ^ "Poland may push back euro rollout to 2012". The Guardian. London. Retrieved September 19, 2008. [dead link]
  20. ^ "Poland may push back euro rollout to 2012". BizPoland. Retrieved September 19, 2008. 
  21. ^ "Constitution of the Republic of Poland of 2nd April 1997, as published in Dziennik Ustaw (Journal of Laws) No. 78, item 483". Parliament of the Republic of Poland. Retrieved September 25, 2009. 
  22. ^ "Polish charter must change before ERM-2". fxstreet.com. Archived from the original on April 23, 2009. Retrieved September 25, 2008. 
  23. ^ Sobczyk, Marcin (May 18, 2011). "Poland Backtracks on Euro Adoption". The Wall Street Journal. Retrieved May 25, 2011. 
  24. ^ "CBOS za przyjęciem euro 32 proc. Polaków, przeciw 60 proc.". bankier.pl. March 28, 2011. Retrieved 2011-04-03. 

External links[edit]