MNI NBP Preview - December 2023: Standing Still

Executive Summary:

• There is firm conviction in the market that the NBP will stand pat on rates.
• Central bank communications emphasise uncertainty around fiscal/regulatory matters.
• The decision will be announced amid simmering tensions with new parliamentary majority.

Full preview including a summary of sell-side views here:

MNI NBP Preview - December 2023.pdf

There is broad consensus that the National Bank of Poland (NBP) will keep interest rates unchanged at the final monetary policy meeting of 2023. The decline in headline inflation has stalled towards the end of 2023, amid normalisation of fuel prices in November, but core continued to ease. Meanwhile, recent communications from the majority wing of the Monetary Policy Council (MPC) emphasised heightened uncertainty around fiscal and regulatory policies of the incoming government, which warrants cautious approach. The NBP will likely stand pat on rates at least until March, when staff will prepare an updated macroeconomic projection, considering the initial decisions of the new government.