Poland: NBP on hold – TDS

The Narodowy Bank Polski (NBP) decided to stay on hold at 1.50% at today's MPC meeting in line with market consensus. Analysts at TD Securities do not see the zloty gaining traction as EUR/PLN trades at 4.290.

Key quotes

“Poland's NBP decided to hold rates in its second rate-setting meeting this year. So the Base Rate has been left unchanged at 1.50%, as we and the consensus had expected.”

“As far as Poland is concerned, the market was priced for 10bps of easing (40% chance of a cut) until yesterday, about 60bps of easing by year-end, and nearly three cuts (or 75bps) by end-2021. We now expect some of these implied expectations to be priced out, but not entirely.”

“FRAs are now pricing in around 60bps of easing by the end of 2020. We think that Glapinski's comments in the upcoming press conference could reduce expectations for easing to around 45-50bps. PLN is unlikely to exhibit further, significant, strength however.”