Poland monetary policy changes not before Q1 next year

Only under extraordinary circumstances would the MPC consider further interest rate cuts. These circumstances could include the drastic appreciation of the PLN against the EUR to below 3.80. 

The possibility of such a scenario is excluded at the moment. Investors will focus on the CPI data in the coming months. 

The CPI bottomed out in February and will gradually increase in the coming months, turning positive again by the end of Q4 2015. The MPC will start discussions about potential monetary policy tightening when deflation ends. 

An acceleration of economic activity and wage growth (expected in H2 this year) could also be used as arguments for rate hikes next year. 

Some MPC members may prefer to start a discussion on the normalisation of monetary policy (in terms of rate hikes) as quickly as possible. 

"We think that monetary policy tightening will start the new council. We keep our view that the start of the tightening cycle will not occur prior to Q1 of next year", Said Societe Generale in a report on Thursday