Commerzbank: NBP’s cautious stance leaves zloty vulnerable
Commerzbank analyst Tatha Ghose expects Poland's central bank to hold its base rate at 3.75% on Thursday, arguing that October's softer inflation reading masks underlying price pressure and leaves the zloty exposed.
Ghose noted that market consensus is nearly unanimous in expecting the National Bank of Poland (NBP) to keep rates unchanged at its November meeting, with Friday’s press conference and updated inflation projections likely to draw more attention than the decision itself.
He pointed out that headline CPI eased to 3.5% year-on-year in October from 4.1% in September, but attributed the drop to temporary government measures rather than a genuine cooling of price pressure. Warsaw cut VAT on fuel to 8% from 23% and lowered excise duties to the EU minimum, which pushed passenger fuel prices down 9.7% month-on-month.
According to Ghose, these administrative interventions should not influence monetary policy, which he said ought to focus on the acceleration in underlying inflation that preceded the October dip. He flagged persistent pressure from energy and commodity prices, a tight labour market, and the scheduled expiry of the fuel-tax relief at year-end as reasons for concern.
Ghose added that upcoming NBP projections may offer some clarity but cannot remove uncertainty tied to future government measures, regulated tariffs, or political developments. In his view, the central bank’s reluctance to act risks leaving Polish monetary policy behind the curve, keeping the zloty under pressure.
Why it matters for markets: The NBP’s rate decision and policy guidance directly influence the zloty (EUR/PLN, USD/PLN), since a hold despite rising underlying inflation could weigh on the currency if investors see Polish real rates falling further behind peers.
Source: FXStreet