National Bank of Poland: Wait-and-see stance holds – ING

ING economists Rafal Benecki and Adam Antoniak expect the National Bank of Poland (NBP) to keep interest rates unchanged at 3.75% on 9 July and through year-end, with hikes ruled out and cuts seen as unlikely in the near term. They argue the easing cycle, interrupted by the Persian Gulf turmoil, will only resume once policymakers gain more confidence in the inflation outlook.

NBP seen holding rates steady

"With inflation back at the 2.5% target in June, we think the Polish central bank is likely to maintain its wait-and-see stance on 9 July. Rate hikes are off the table, while cuts remain unlikely in the near term. Rates should stay unchanged through year-end, although easing discussions may re-emerge later this year."

"At the beginning of June, rate forwards were pricing in more than three rate hikes, whereas by the start of this month some investors had already begun betting on rate cuts later this year. Our views are less volatile. Throughout the US-Iran war, we held the view of flat NBP rates."

"Now, our baseline scenario also assumes that rates remain unchanged (at 3.75%) until the end of 2026, as we see CPI slightly above the 2.5% year-on-year target for the rest of this year."

"We expect the Monetary Policy Council to leave rates unchanged in July and maintain its wait-and-see stance. The easing cycle in Poland was interrupted by turmoil in the Persian Gulf, but policymakers will require greater confidence in a favourable inflation outlook before resuming monetary easing."