Poland likely on hold even as deflation continues

In Poland, the NBP meets next week following its 50bp cut to 1.5% last month. Given its announcement that this is the last and final cut, expect the NBP to remain on hold for the next few meetings. 

The PLN has appreciated rapidly in line with ECB asset purchases and thus causing monetary conditions to tighten. Poland's CPI at -1.6% y/y remains in deflation and the lowest in the region. 

Barclays Capital says - "We expect a slight improvement in March CPI (out next week) to -1.4% y/y due to an easing of food deflation. However, rising employment and car production suggest possible growth improvement that could ease the pressure on the NBP to loosen rates further."