There should be no surprises from the Polish central bank (NBP) today. It is consensus that it will keep the key interest rate at 5.75%, where it has stood since October last year, Commerzbank’s FX Analyst Antje Praefcke notes.

NBP's restrictive stance is a supportive factor for PLN

“The prevailing opinion in the Monetary Policy Council (MPC) is that interest rates cannot be lowered further until next year at the earliest. Even the head of the central bank, Adam Glapinsiki, who had long said that key interest rates would remain unchanged until 2026, recently changed his stance and no longer wanted to rule out a discussion about cuts in 2025. However, interest rates are likely to remain at their current levels until at least the end of the year.”

“Inflation stood at 4.30% in August, with core inflation at 3.8%, which is still above the inflation target (2.5% /-1%). This underpins the NBP's stance, especially as price pressure has recently increased again somewhat. At tomorrow's press conference, Glapinski is likely to confirm the NBP's view that there will be no interest rate cuts this year. No surprises are to be expected here either, so the decision for the PLN should be neutral.”

“We have often pointed out that the monetary policy considerations of the decision-makers are likely to be politically motivated, which justifies a risk premium on the zloty in the medium term. At the moment, however, the market still sees the NBP's restrictive stance as a supportive factor for the zloty.”