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NBP Delivers ‘Dovish’ Hike To Limit Downside Risk

POLAND
  • The NBP delivered a lower than expected hike yesterday, raising the policy rate by 50bps to 6.5% (vs. 6.75%).
  • This was a surprising announcement from NBP considering that CEE peers have kept 'very hawkish' stance to protect the currency in the current risk off environment.
  • It seems that policymakers have been considering the growth side of the equation; we saw that manufacturing PMI fell sharply to 44.4 in June (vs. 47.5 exp.).
  • NBP reiterated in its statement that future policy decision will depend on Ukraine situation and economic data, and that it stands ready to intervene in FX market if needed.
  • NBP also reviewed its CPI forecasts to the upside, up to 13.2% - 15.4% for 2022 (vs. 9.3% - 12.2% previously) and to 9.8% - 15.1% for 2023 (vs. 7% -11% previously).

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