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.
Executive Summary:
- The NBP kept interest rates unchanged for the four consecutive time.
- The tone of the statement arguably turned more hawkish.
- Governor Glapiński said that he does not expect any moves in rates in 2024.
Full review document including a summary of sell-side views here:
MNI NBP Review - February 2024.pdf
The National Bank of Poland (NBP) kept interest rates unchanged for the fourth consecutive meeting, revisiting all the familiar tropes from the January statement. The language used to describe the macroeconomic situation and interest-rate outlook was slightly more hawkish, even as the shift boiled down to just a few subtle adjustments to the statement. During his press conference, Governor Adam Glapiński reiterated that inflation will approach the +2.5% Y/Y +/- 1pp target in March before rebounding, with much uncertainty around the medium-term outlook. The official guided that interest rates are unlikely to change through the remainder of this year.
Fig. 1: Inflation scenarios for 2024. The red line shows a scenario in which the 5% VAT on food is reinstated and the energy price freeze is lifted. The green line shows a scenario in which both anti-inflationary measures remain in force. The slide was retrieved from Governor Glapinski's presentation (8th February 2024) delivered during his press conference, with a video recording available on the NBP’s website.
Overall, the statement and the presser confirmed that the NBP’s reaction function has evolved and now puts more weight on medium-term inflation and less weight on near-term fluctuations. The Governor’s forward guidance, framed as his personal assessment of sentiment within the MPC, was interpreted as a hawkish surprise, prompting the PLN to rally and pushing market rates higher. We now expect the NBP to stand pat on rates at least through the rest of 2024, with little potential for the central bank to change tack, with policymakers looking to anchor inflation near its target over a longer horizon. The release of the next macroeconomic projection in March will be an occasion to revisit interest-rate forecasts.
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.