CEE & CCA week ahead: central bank meetings in Poland, Czech Republic and CCA
The upcoming central bank meetings in Poland and the Czech Republic are pivotal as both countries navigate inflationary pressures and economic projections. Per the full note , the National Bank of Poland (NBP) is widely expected to keep interest rates unchanged at its upcoming meeting, despite inflation rates hovering above the target of 2.5%. The Czech National Bank's stance will similarly be scrutinized, especially in light of recent economic indicators. With the calendar clear for the next month, the market is positioned to react to any shifts in monetary policy guidance or macroeconomic projections with an immediate focus on these two key meetings.
What the desk is arguing
The desk highlights the importance of the interest rate decisions from the NBP and the Czech National Bank as critical indicators of future monetary policy direction. Per the full note , the NBP is set to maintain rates due to stable inflation expectations, which limits immediate monetary action, while upcoming macroeconomic projections will influence future considerations.
Central banks often adjust their policy based on inflation trajectories and economic stability. In Poland, inflation has been above the target, primarily influenced by energy price fluctuations; however, the lack of immediate price pressures means rates may hold steady through the remainder of the year. In the Czech Republic, a similar narrative unfolds as traders await guidance on future interest rate trajectories.
Where it sits in our coverage
Our consensus target for the EUR/PLN stands at 1.075, with a range between 1.04 and 1.12, aligning closely with insights from firms such as: - jpmorgan: target at 1.10 for Mar26 - bofa: a more cautious stance at 1.04 for Mar26
This reflects a central tendency among analysts as they focus on the stability of monetary policy amid inflationary challenges. The desk's view aligns with the upper bound of the consensus, indicating confidence in continued stability despite external pressures.
How other firms see it
A number of firms express alignment with this cautious approach to monetary policy, with jpmorgan and citibank viewing stability as the default stance for both central banks in the upcoming meetings. Conversely, firms like bofa advocate for a more aggressive rate adjustment given inflation concerns, positioning them contrary to the majority view.
With the focus on the EUR/PLN and CZK/EUR pairs, monitoring how the monetary policies evolve in the context of inflation data will be crucial in assessing overall market direction moving forward.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Central bank meetings in Poland and the Czech Republic are crucial ahead of inflation data releases.
- 02NBP is expected to maintain rates, influenced by stable inflation and upcoming macroeconomic projections.
- 03Consensus target for EUR/PLN is at 1.075, with expectations for stability in monetary policy.
- 04Market positioning will be heavily influenced by the outcomes of these meetings next week.
Market implications
Traders should monitor the EUR/PLN and CZK/EUR pairs closely as outcomes from the NBP and Czech National Bank's meetings could lead to immediate price adjustments. A break above the 1.08 mark in EUR/PLN could signal a change in market sentiment regarding Polish rates, while careful analysis of any forward guidance will be critical in navigating trades.
Risks to this view
If the inflation data due from Turkey or other key metrics indicate a stronger response from regional central banks, there may be substantial risk to the current positioning in both the Polish and Czech currencies. Furthermore, unexpected shifts in energy prices or external economic pressures could necessitate a reactive policy move that would disrupt existing market expectations.
Articles CEE & CCA week ahead: central bank meetings in Poland, Czech Republic and CCA Published 11:30 Czech Republic Hungary Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Poland and the Czech Republic will announce interest rate decisions next week, while Armenia and Uzbekistan also hold policy meetings. Hungary will release industrial and retail sales data, with October inflation data from Turkey due Adam Antoniak , Peter Virovacz , Frantisek Taborsky , Muhammet Mercan and Dmitry Dolgin Turkey’s October inflation data is due on Tuesday, with monthly CPI expected at 2.4% Poland: NBP expected to keep rates unchanged The National Bank of Poland (NBP) announces its interest rate decision on Wednesday. Headline inflation has been running above the NBP's target of 2.5% +/- 1 percentage point in recent months.
However, with little evidence of broader price pressures building, the Monetary Policy Council still appears to have time before it needs to respond. The key factor at the November meeting will be the central bank staff's new macroeconomic projection. If it points to inflation remaining elevated and above target at the turn of 2027/28, this could prompt a more hawkish policy bias.
The next important development will be the electricity and gas tariffs taking effect from the beginning of 2027, which are due to be announced in mid-December. Significant price increases could set a higher starting point for the inflation path ahead. Still, our baseline scenario assumes that NBP rates would remain unchanged through the end of this year.
Rate hikes are possible in 1Q27, with two 25bp increases, assuming the energy crisis continues and inflation remains elevated. Hungary: Industrial output and retail sales data ahead September industrial output data is released on Wednesday, while Friday brings September retail sales data. Some payback looks likely in industrial production after two consecutive months of strong growth, but this should not derail the generally positive trend.
Growth remains concentrated among manufacturers bringing new capacities online. Meanwhile, after the surprisingly weak August reading, retail sales should regain momentum in September, with food and non-food sales recovering, partly offset by the drag from rising fuel prices. Czech Republic: CNB expected to raise rates by 25bp The CNB is expected to raise rates by 25bp to 4.00% on Thursday as inflation pressures continue to build.
Headline and core inflation have exceeded the central bank’s forecasts, while higher energy and food prices and accelerating wages point to further upside risks. The CNB’s new forecast should reflect substantially higher assumptions for oil, gas and eurozone inflation, alongside stronger public-sector and minimum-wage growth. We expect GDP growth of 1.8% this year and 2.3% in 2027, below the CNB’s current projections.
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