No surprises from NBP – Commerzbank

There should be no surprises from the Polish central bank (NBP) today. It is a consensus that it will keep the key interest rate at 5.75%, where it has been since October last year, notes Antje Praefcke, FX analyst at Commerzbank.

The NBP’s restrictive stance is a supporting factor for the PLN

“The prevailing view in the Monetary Policy Council (MPC) is that interest rates cannot be cut further until next year at the earliest. Even central bank chief Adam Glapinsiki, who has long said that key interest rates would remain unchanged until 2026, recently changed his stance and no longer wanted to rule out a discussion of cuts in 2025. However, interest rates are likely to remain at their current levels at least until the end of the year.”

“Inflation stood at 4.30% in August, with core inflation at 3.8%, which is still above the inflation target (2.5% +/-1%). This supports the NBP’s stance, especially as price pressure has increased again recently. At tomorrow’s press conference, Glapinski is likely to confirm the NBP’s view that there will be no interest rate cuts this year. No surprises are expected here either, so the decision for the PLN should be neutral.”

“We have often noted that monetary policy considerations of policy makers are likely to be politically motivated, justifying a risk premium on the zloty in the medium term. However, at the moment, the market still views the NBP’s restrictive stance as a supportive factor for the zloty.”