National Bank of Poland likely to keep key rate and other policy parameters unchanged

The National Bank of Poland is expected to keep the policy rate on hold during its meeting today, noted Commerzbank in a research report. Other policy parameters are also anticipated to be kept unchanged today. Although markets are expected to be keeping an eye for the degree to which MPC hawks are starting to feel correct that inflation is set to accelerate to the target rate of 2.5 percent.

The PMI data has rebounded in the past month, while manufacturing data have strong. This has coincided with inflation recording a sharp rise, too, with core inflation coming out of deflation, stated Commerzbank.

Furthermore, the latest weekly fuel prices imply that the energy component alone might contribute a full one percent point to the headline consumer price inflation in the months ahead. These developments have been greatly underpinning the Polish zloty. However, for the time being, the central bank’s MPC might provide a relaxed stance, while highlighting the requirement to observe price developments. Additional hawkish signals than this, or comments repeating that rate hikes would have to come soon, might act as zloty positive at the margin, added Commerzbank.