The National Bank of Poland are set to.......>

POLAND: The National Bank of Poland are set to announce their first MPC meeting

of the year tomorrow. While rates are expected to remain on hold at 1.5%, main

focus will turn to the statement and press conference for direction. Further to

this Morgan Stanley note a local newspaper reported that the MinFin and

state-owned bank BGK sold EUR on the market in late 2017 in order to increase

liquidity in PLN ahead of some large expenditures. They add, "given that the

transaction was authorised by both the MinFin and NBP, the market took it as a

signal that the NBP is happy with PLN strengthening." Since then, EUR/PLN moved

another 2% lower. Morgan Stanley say "they do not believe the NBP will openly

try to talk Pln weaker, though it may refer to Pln strength as one more reason

to be patient on rates." Overall, a combination of a strong PLN and a downside

surprise in the latest CPI should keep the NBP from turning more hawkish on the

margin. Eur/Pln last Pln4.1780/85.