National Bank of Poland preview: Inflation at 4%, but MPC unlikely to act yet
At a Glance
The Polish Monetary Policy Council (MPC) is expected to maintain the policy rate at 3.75% during its meeting on October 7, despite inflation rising to 4.0% year-on-year. This decision hinges on limited price pressures outside of the fuel sector and an anticipated reduction in inflation due to government interventions. Per the full note from ing-think, macroeconomic projections in November could signal the earliest opportunity for rate hikes, likely occurring in the first quarter of 2027 with two increments of 25 basis points each.
Key Takeaways
- 01The MPC is likely to keep rates at 3.75%, with potential hikes projected for Q1 2027.
- 02Inflation is currently at 4.0%, driven mainly by rising fuel prices.
- 03Government interventions are expected to ease inflation, providing room for the MPC to hold steady.
- 04Upcoming macroeconomic projections in November may influence future rate decisions.
Full Analysis
What the desk is arguing
The desk anticipates that the National Bank of Poland will keep its interest rate stable at 3.75% as there are no immediate indicators supporting monetary tightening. Per the full note from ing-think, the current inflation level, albeit above target, will be moderated by recent government fuel policy changes.
Moreover, the report emphasizes that inflation's rise is primarily driven by fuel prices, suggesting the MPC can afford to remain patient before making policy shifts. Notably, the fuel market intervention is projected to reduce inflation by approximately 0.7 percentage points.
Where it sits in our coverage
Our consensus target for EUR/PLN is currently set at 1.075, falling within a range of 1.04 to 1.12. Specific forecasts include: - jpmorgan: 1.10 (target for Mar26) - bofa: 1.04 (target for Mar26)
This outlook aligns with the broader consensus, as our call is centrally positioned and does not deviate significantly from expectations set by other firms.
How other firms see it
Aligned firms such as jpmorgan are advocating for a stable rate approach, reflecting a unified stance among several analysts. Conversely, bofa stands out with a more cautious forecast, suggesting a quicker response from the MPC might be necessary than currently anticipated.
Interest in closely monitoring EUR/PLN movements is warranted, particularly given the influences of regional developments and potential spillovers from broader ECB policies that intersect with this forecast.
Market Implications
Trade positioning on EUR/PLN remains pivotal, especially as markets react to central bank communications. A shift beyond the 1.08 level could signal changing sentiment regarding inflation's trajectory.
From the original
Older quick take Quick take Published 11:45 Poland National Bank of Poland preview: Inflation at 4%, but MPC unlikely to act yet We expect the Polish central bank to keep policy rates unchanged on 7 October. Although inflation is well above target, there are no immediate signs of
Related speeches
4 itemsPolish MPC remains patient and keeps policy rates on hold in October
Per the full note from ing-think, the National Bank of Poland kept its reference rate at 3.75% in October, and the desk argues this on-hold stance can persist for several months despite headline inflation rising. The MPC attributed the September uptick primarily to fuel prices while core inflation likely edged lower, and it introduced 'regulatory decisions concerning energy prices' as a new risk to the outlook. Analysts Rafal Benecki and Adam Antoniak frame the statement as broadly neutral with a mildly dovish tint, suggesting any tightening cycle would not arrive until 1Q27 — and would be less aggressive than markets currently price. No high-impact events are scheduled for Poland over the next 30 days, meaning the next real catalyst is Governor Glapinski's press conference and the evolution of regulated energy prices. Our internal coverage bundle contains no tracked currency pair for this commentary, so we have no consensus target or per-firm spread to anchor against.
Polish rates remain unchanged; post-meeting statement signals continuity
Per the full note [source], the National Bank of Poland held its main rate at 3.75% in September, matching market consensus, with a press release broadly unchanged from July, signaling policy continuity. The Council acknowledged firmer GDP growth and higher CPI inflation driven by fuel prices but saw only a modest rise in core inflation and noted weaker wage growth and falling employment as offsetting factors. The desk at ING sees rates on hold in the coming months, with potential cuts delayed until 2H26, and dismisses any near-term easing despite Governor Glapiński's earlier dovish tilt. This view sits within a stable Polish macro backdrop, with no high-impact domestic events on the calendar over the next month to force a rethink.