Polish Zloty: Policy on hold as inflation stays near band – ING

ING economists Rafal Benecki and Adam Antoniak expect the National Bank of Poland (NBP) to keep its policy rate at 3.75% at the 7 October Monetary Policy Committee (MPC) meeting. They see November as the earliest point for any change, with fresh projections available, and currently anticipate two 25bp rate hikes in the first quarter of 2027 as inflation risks persist.

Polish rates seen steady for now

"On Wednesday 7 October, the Monetary Policy Council (MPC) will announce its interest rate decision. We expect the Council to leave the National Bank of Poland's policy rate unchanged at 3.75%. We see November as the first meeting at which the MPC could change policy, as a fresh set of macroeconomic projections will then be available."

"We believe there is still time to wait-and-see, and we expect rate hikes in the first quarter of 2027 (two 25bp moves)."

"On the one hand, inflation rose to 4.0% YoY in September. The government intervention in the fuel market will deduct 0.7pp from CPI, but it is likely to remain around the upper end of the tolerance band around the target in the coming months. This means that the real interest rate will remain close to zero in the short term."

"The third intervention in the fuel market (lowered excise duty and VAT until the end of 2026) reduces the projected inflation path and brings inflation back towards the upper end of the tolerance band around the target."

"This is prolonging the period of elevated commodity prices and inflation and, in our view, may require the MPC to implement a pre-emptive rate hike in 1Q27 to prevent inflation from becoming entrenched at an elevated level."