No surprises from BNP – Commerzbank

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

The NBP’s restrictive stance is a supportive factor for PLN

“The prevailing view of the Monetary Policy Council (MPC) is that interest rates cannot be cut further until next year at the earliest. Even the head of the central bank, Adam Glapinsiki, who has long said that key interest rates will remain unchanged until 2026, recently changed his position and no longer wanted to rule out a discussion of cuts in 2025. However , interest rates are likely to remain at 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 BNP’s position, especially as price pressure has picked up again somewhat recently. At tomorrow’s press conference, Glapinski is likely to confirm the BNP’s view that there will be no rate cuts this year. No surprises are expected here either, so the decision for PLN should be neutral.”

“We have often emphasized that policymakers’ monetary policy considerations are likely to be politically motivated, which justifies a risk premium on the zloty in the medium term. Currently, however, the market still sees BNP’s restrictive stance as a support factor for the zloty.”