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Executive Summary:
- The NBP is widely expected to keep interest rates unchanged again.
- Headline inflation dipped below the +2.5% Y/Y target but upside risks remain.
- Recent communications signalled the cautious approach of most MPC members.
Full preview including a summary of sell-side views here:
MNI NBP Preview - April 2024.pdf
The National Bank of Poland (NBP) will most likely keep interest rates stable this week, striking familiar cautious notes in the statement and during the subsequent press conference with Governor Adam Glapiński. Although headline inflation dipped below the NBP’s point-target of +2.5% Y/Y in March, the central bank has been warning for several months that CPI will accelerate going forward. Official rhetoric has also emphasised that the uncertainty around the government’s decisions concerning anti-inflation shields warrant keeping interest rates on hold and maintaining a vigilant approach. Recent communications from several Monetary Policy Committee (MPC) members suggest that the prevalent view within the panel remains that interest rates will most likely stay on hold in the coming months, possibly through the rest of this year.
Figure 1. Poland CPI and core CPI inflation. The red line represents the NBP’s official +2.5% Y/Y target, while the shaded region represents the +/- 1pp tolerance band around the point-target.
Governor Glapiński’s press conference on Friday will be closely watched for any updates to the inflation outlook included in the macroeconomic projection released last month. If NBP staff fed the latest inflation print and some of the government’s administrative decisions into their model, the Governor could theoretically offer some more detailed discussion of the expected inflation path. In any case, we expect him to deploy cautious rhetoric, placing much emphasis on upside risks to inflation and extant underlying price pressures. He may also touch upon the motion to put him on trial before the Tribunal of State, which has been formally tabled in parliament and awaits clearance from the Speaker. If it gets a green light, the first step will be a series of hearings before a special parliamentary committee, which will decide whether to refer the case to the Tribunal.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.