The National Bank of Poland (NBP) is set to announce its monthly interest rate decision today. As widely anticipated, the central bank is expected to keep its benchmark interest rate unchanged, according to Commerzbank’s FX analyst Tatha Ghose.
While Poland has seen a significant moderation in its inflation rate, approaching the target level, the NBP is likely to maintain a cautious stance due to several factors. The recent upward spike in inflation, largely attributed to the unwinding of pandemic-era energy and food pricing measures, has had a minimal impact and quickly subsided.
However, the bank’s decision-making process appears to be influenced by political considerations. Adam Glapinski’s faction on the Monetary Policy Council has been resistant to rate cuts, potentially hindering a more accommodative monetary policy.
Commerzbank believes that the NBP’s insistence on maintaining a hawkish stance, despite the easing inflationary pressures, could negatively impact the Polish zloty. The bank argues that such a policy divergence from economic fundamentals could undermine the currency’s value.
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While the market consensus leans towards a rate hold, investors will be closely watching the NBP’s press conference for any hints on future policy direction. Any unexpected shift in tone or guidance could have significant implications for the Polish economy and the zloty exchange rate.
