Poland’s National Bank is set to maintain its current base rate for an extended period as energy market volatility reshapes monetary policy expectations, according to Commerzbank analyst Tatha Ghose. The forecast follows recent Iran-related energy shocks that have triggered significant repricing in forward markets, with traders now eliminating previously anticipated medium-term rate cuts from their positions. The shift reflects growing uncertainty around Poland’s inflation trajectory as geopolitical tensions threaten energy price stability across European markets.
The extended hold stance marks a notable hawkish pivot for the NBP, which had been navigating a complex inflation environment before the latest energy disruptions. Polish zloty traders and regional fixed income desks are adjusting positions accordingly, with the changed rate cut expectations likely to support the currency in the near term while pressuring domestic bond markets. Financial institutions with Polish exposure should reassess their hedging strategies as the timeline for monetary easing extends beyond earlier projections.
FXnCO Insight
Traders should monitor PLN strength against EUR as extended higher rates improve carry trade attractiveness while reducing bond rally potential.
Source: FXStreet