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NBP 'Hawk' Hardt Continues to Support a 'Delicate' 15bps Hike

POLAND
  • Discovery Inc. lashed out at Poland's media regulator, saying its campaign to limit the company's local operations jeopardized the rule of law and media freedom. The comment is a response to the country's watchdog, known as KRRiT, which said it may ask the U.S. broadcaster to adjust the ownership structure of its Polish business so that it complies with local law. (BBG).
  • On September 28, the NBP will hold an extra meeting but is not going to take any policy decisions.
  • This morning, NBP member Eryk Lon wrote in an article that he is not yet determine how he is going to vote during the November meeting, but he is clearly against actions that could lead to a radical appreciation of the Zloty.
  • This morning, NBP 'hawk' Lukasz Hardt told at a seminar in Warsaw that CPI inflation projection in November may be higher than the July one and therefore the central bank needs to start a tightening cycle with a 'delicate' 15bps to curb the inflationary pressures. Hardt added that NBP can hike rates without signaling QE Taper.
  • Yesterday, policymaker Cezary Kochalski said in an interview that it is still too early for the NBP to tighten its policy even though Polish inflation is very likely to remain above 5% until the end of the year.
  • Last week, NBP member Jerzy Kropiwnicki mentioned that a rate hike in coming months cannot be ruled out and that the central bank decision will depend on the November projection. The first hike is likely to be 'small' and the NBP would not have to stop QE first to embark in a tightening cycle.
  • At this stage, there are three policymakers (Hardt, Gatnar and Zubelewicz) voting for an 'imminent' rate hike as they mentioned several times that inflation is now demand-driven in Poland and a gradual tightening could ease the inflationary pressures.
  • The dovish NBP has been weighing on both PLN and LT bond yields this month, with the zloty trading at multi-month lows against some major crosses this week (i.e. EUR, USD, JPY).
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