Information about the break-even exchange rate of the zloty is collected from cyclical enterprise surveys. Break-even exchange rates determine the levels of the zloty exchange rates against the euro and US dollar which would either stimulate or cool down the economic activity of Polish enterprises. The paper addresses issues related to economic interpretation, volatility and importance of the break-even exchange rates for the diagnosis of the competitive position of Polish enterprises in domestic and overseas markets.

The primary goal of this paper was to find a precise definition of break-even exchange rates. It was assumed that the break-even exchange rate corresponds to the lowest level of the nominal exchange rate of the zloty at which an enterprise does not lose on exports or on sales on domestic market. On the basis of the proposed definition the author tried - using a panel model - to explain why break-even exchange rates are concurrent with the current exchange rate. The presented interpretation and the empirical analysis allow us to describe average break-even exchange rates as indicators aggregating information on such factors as relative price change, changes in the productivity level or adjustment costs of enterprises, i.e. on factors which affect profit sensitivity of enterprises to exchange rate changes.

In the case of individual enterprises, break-even exchange rates are determined by structural factors, which are relatively stable over time. This is indicated by both observed proneness of enterprises to declare continuously high or continuously low break-even exchange rates and close relation between the level of break-even rates related to the activity of individual companies on domestic markets and the level of such rates related to the activity on overseas markets. The hypothesis that lasting diversity of the break-even exchange rates among enterprises may have a significant impact on the formation of average break-even rates over time has not been confirmed. The fact that the less effective companies leave the market during the zloty appreciation periods or enter the market during depreciation periods does not influence changes in the average break-even rates.