WARSAW: The Polish zloty hit its highest level in four years on Monday, continuing a rally as interest rates in Poland stay stable while falling elsewhere in central Europe and as the EU unlocks funds that had been caught up in long-running disputes.

By 0836 GMT, the Polish zloty was up 0.2% against the euro at 4.2935, after hitting 4.2915, its strongest level since March 2020. It has gained more thank 1% this year, while the Hungarian forint and Czech crown have lost almost 3%.

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“In Hungary and the Czech Republic there is constant talk of cutting interest rates. Over here (in Poland) the comments are clear that rates will not be changed, so obviously the zloty is more attractive than the crown or the forint,” a Warsaw-based trader said.

The trader said that expected flows of unblocked European Union funds for Poland will likely partially be traded on the market, adding further support for the zloty.

The National Bank of Poland (NBP) has been on pause since cutting interest rates by a combined 100 basis points in September and October last year as uncertainty over the government’s fiscal policy remains.

On Monday, Poland’s central bank provided two sets of economic forecasts, one for a scenario in which anti-inflation measures are extended by the government and another for a scenario in which they are not.

The zloty also received a jolt last month when EU officials said Poland would gain access to up to 137 billion euros in funds that had been blocked in a rule-of-law dispute with the previous government.

A new pro-EU government under Prime Minister Donald Tusk has worked to end these disputes.