Governor’s interview ends zloty rally – ING

The quiet day in the region yesterday was disrupted at the end of the day by headlines from an interview with the Governor of the National Bank of Poland (NBP) after the non-monetary decision meeting. The NBP is on summer break in August and the next monetary meeting is not until the end of September, ING’s FX strategist Frantisek Taborsky notes.

PLN’s rally over the last 10 days is over

“Governor Adam Glapiński seems to have taken the opportunity to express his views after some of his colleagues downplayed his recent comments about rate cuts as late as 2026. In yesterday’s interview, the governor acknowledges the possibility of the economy and inflation surprising to the downside next year, but it seems his base case scenario is still more of a rate cut in 2026 given the upside risks to inflation in his view.”

“Our economists still see the first rate cut in the second quarter of 2025, which seems like the best decision given the inflation profile for the coming months. There is a chance we could see a rate cut in the first quarter of 2025 if the numbers surprise on the downside. Therefore, we believe that lower market rate levels would again be followed by new pay flow later.”

“While the rates picture is mixed in the short term, we see FX more clearly. PLN reacted by weakening yesterday and we expect to see more today. In our view, this concludes the PLN’s rally over the last 10 days and our bias turns bearish with EUR/PLN 4.290 as the first stop indicated by yesterday’s fall in the rate differential.”