National Bank of Poland likely to keep interest rate on hold in January

The National Bank of Poland is set to meet tomorrow for its interest rate. According to an Erste Group Research report, the Monetary Policy Committee is expected to keep the key interest rate on hold.

The solid rise in inflation in December significantly escalated the risk of inflation remaining above the target throughout 2020. Therefore, market expectations for a rate hike might rise in the months ahead, especially if inflation continues to come above central bank’s target and tolerance band.

“However, we continue to think that stability of rates is the most likely scenario until the end of 2021, as inflation has mainly been driven by non-core items (food and oil prices)”, added Erste Group Research.