Poland’s central bank is widely expected to hold its benchmark interest rate steady at 3.75 percent, with market forwards already pricing in this outcome according to Commerzbank analyst Tatha Ghose. The National Bank of Poland faces near-zero inflation momentum as energy-driven disinflation returns to the economy, prompting a dramatic shift in rate expectations. Markets have completely reversed earlier bets on potential rate hikes, with some analysts now discussing possible monetary easing as early as the fourth quarter of this year or March 2027.
The neutral monetary policy guidance from the MPC suggests the Polish zloty could underperform against regional peers in the near term. Traders who had positioned for a more hawkish stance are unwinding those bets as the disinflation trend solidifies. The shifting rate outlook reflects broader pressures on the Polish economy and changing inflation dynamics across Central Europe.
FXnCO Insight
Traders should consider reducing long zloty positions as neutral rate guidance and potential 2025-2027 easing cycles point to relative underperformance versus higher-yielding CEE currencies.
Source: FXStreet