National Bank of Poland preview: No cuts, but no hikes either
At a Glance
The National Bank of Poland (NBP) is expected to maintain its interest rate policy unchanged in September, a stance that reflects concerns about inflation amidst rising geopolitical tensions and energy prices. Per the full note from ing-think, heightened anxieties in the Middle East and increasing oil prices leave little room for easing, despite previous dovish signals from NBP Governor Adam Glapiński. Inflation reached 2.5% in July and August, nearing the upper limit of the NBP's acceptable range, aligning with the governor's growing caution following his more optimistic July projections. Without any upcoming market-moving events, traders should prepare for a steady policy outlook until year-end, barring unexpected inflation fluctuations.
Key Takeaways
- 01The NBP is likely to keep interest rates unchanged through September.
- 02Inflation near the upper NBP target suggests caution in future rate decisions.
- 03Geopolitical tensions could exacerbate inflation concerns, limiting policy shifts.
- 04The desk's view aligns with a cautious market outlook amidst no significant upcoming events.
Full Analysis
What the desk is arguing
The NBP's decision to hold rates steady reflects a prudent approach given the recent uptick in inflation and external geopolitical risks. Per the full note , the latest macroeconomic indicators have proven too volatile for any decisive action on rates. In July, inflation hit 2.5%, indicating that current levels remain precarious and close to the NBP's upper threshold, prompting Governor Glapiński to recalibrate his outlook.
This dovish pivot signals a retreat from earlier hopes for a potential easing cycle that Glapiński hinted at during the last policy meeting. Rising tensions in the Middle East further complicate this by introducing supply-side uncertainties that could destabilize the inflation outlook, echoing the sentiments expressed in the ing-think commentary.
Where it sits in our coverage
Our consensus target for the EUR/PLN is set at 1.075, reflecting a narrow range: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
The desk’s outlook aligns with jpmorgan, indicating stability in the Polish currency market but diverges from bofa, forecasting a more cautious approach amidst rising inflationary pressures. This establishes our call at the higher end of the anticipated range, suggesting a preference for strategic long positions against the PLN given our expectation for stability.
How other firms see it
A cohort of firms, notably jpmorgan, sees the NBP taking a wait-and-see approach, reinforcing the current interest rate level amidst inflation concerns. In contrast, bofa maintains a more aggressive stance that anticipates potential cuts should inflation readings soften.
Key related indicators include Polish inflation data and broader eurozone economic conditions, underscoring the interconnectedness of these markets, which are relevant for cross-border trade and investments involving EUR/PLN pairs.
Market Implications
Traders should monitor the EUR/PLN near the 1.075 level for potential reversals or continuation patterns, especially as the market digests inflation data from upcoming weeks.
From the original
Articles National Bank of Poland preview: No cuts, but no hikes either Published 13:31 Poland Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download We expect the Polish central bank to keep policy rates unchanged in September as renewed tensions in the Midd
Related speeches
4 itemsNational Bank of Poland preview: In a sweet spot for now
The National Bank of Poland (NBP) is expected to maintain its current interest rate at 3.75% during the upcoming July meeting, as inflation has recently stabilized at the target level of 2.5%. Per the full note from ing-think, the central bank is likely in a "wait-and-see" mode, with no rate cuts anticipated in the immediate future despite fluctuations in global oil prices. Market expectations have shifted significantly, moving from forecasts of multiple rate hikes to the possibility of cuts later in the year, but our desk maintains that the rates will remain untouched through at least year-end 2026.
NBP Governor turns less dovish, remains far from rate-hike pricing
The desk posits that the National Bank of Poland (NBP) will maintain its interest rates until at least mid-2027, despite indications from Governor Adam Glapiński of a less dovish stance amid rising energy prices and inflation concerns. Per the full note [source], while Glapiński's tone has shifted toward cautious optimism, he still does not endorse imminent rate hikes, deviating from market expectations that predict approximately 75 basis points of increases over the next year. Given this backdrop, the current consensus of unchanged rates aligns with our outlook as we closely monitor inflation data and energy prices, which are key drivers of the NBP's policy considerations.