Huge decline in oil prices continues to put downward pressure on Poland's inflation as core inflation continues to trend downward, holding barely above zero percent. Amid economy slowdown the current Monetary Policy Committee (MPC) at the National Bank of Poland has left its key interest rate unchanged at 1.5 percent in 2015.
The next MPC meet will be held in the second half of 2016, as eight of the ten MPC members will be replaced in the following months, while the governor will be replaced by mid of this year.
A sharper downturn and/or a somewhat stronger PLN might result in two rate cuts, while strong rebound in oil prices and/or weak PLN might result in less than two rate cuts.
"We have factored in two more 25 bp rate cuts during autumn. Timing-wise because we believe the new MPC will have a strong inclination not to set a new direction until all new members have joined." - Nordea Markets
