MNI NBP Preview - Dec 2024: Steady At Least Until March
Executive Summary:
- The NBP effectively ruled out cutting rates at least until March.
- Inflation remains above the target despite dovish activity data.
- Post-meeting statement and press conference will be in focus.
Full preview including a summary of sell-side views here:
MNI NBP Preview - December 2024.pdf
The National Bank of Poland (NBP) is poised to extend its prolonged interest-rate freeze as inflation still hovers above the target, despite somewhat dovish data from the real economy. Monetary Policy Council (MPC) members effectively ruled out cutting rates before the publication of the next inflation projection in March and are highly unlikely to risk severe credibility costs that would be generated by a decision to renege on this commitment. The understanding that the MPC has effectively tied its hands at least until well into 1Q2025 underpins a unanimous consensus call for an on-hold decision this week. However, the press conference with Governor Adam Glapiński will still be closely watched, with analysts and market participants on the lookout for his assessment of the government’s recently announced decisions on energy price caps and hints on the likely starting point of the upcoming easing cycle.