Zloty Creeps Higher As Dust Settles After NBP Rate Decision

EUR/PLN remains under pressure, easing into the government's preferred 4.40-4.60 range again. The rate last deals at 4.5964, down 77 pips on the session, with bears looking for a dip through the 200-DMA/Sep 25 low at 4.5840/31. On the flip side, bulls see the 4.70 area as their key near-term target.

• Governor Glapinski deployed a somewhat ambiguous rhetoric on the zloty yesterday. The official reaffirmed the NBP's hands-off approach, noting that the central bank only intervenes if needed to smooth out volatility, while the PLN remains fundamentally a free-floating current. On the other hand, he said that the NBP will seek to avoid triggering excessive PLN swings with its monetary policy decisions.
• MPC's Maslowska largely reiterated the main tropes of the Governor's presser and played down the importance of PLN depreciation in September.
• PLN/EUR basis swaps have stabilised today, following a sharp decline over the past month or so, and last sit at 111bp.
• POLGB curve has bear steepened at the margin, with yields last seen 1.1-3.0bp higher.
• The focus turns to Poland's hotly contested elections on October 15.