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November NBP Meeting on The Radar

POLAND
  • As expected, the National Bank of Poland kept its policy rate on hold at 0.1% despite the positive surprise in inflation in August as the economic situation around the world continues to worsen due to the Delta variant.
  • The majority of the NBP board continues to confirm that inflation in Poland is driven by factors beyond the scope of monetary policy.
  • Hence, the significant increase in fuel and food prices combined with temporary disruptions in supply chains will likely translate into inflation rate remaining above the 3.5% NBP upper tolerance band.
  • As a reminder, August CPI came in higher than expected at 5.4% YoY (vs. 5.1%), up from 5% the previous month.
  • The statement, which was again slightly 'dovish', has led to some broad PLN weakness against major crosses since yesterday evening.
  • However, forward rates have not consolidated, confirming that traders are still viewing the November meeting as a pivotal moment, which could be the start of a gradual tightening cycle.
  • Markets will closely follow Glapinski news conference at 2pm (London time) for further information on the NBP policy outlook.

Source: Bloomberg/MNI

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