Although the Polish central bank is likely to hibernate for the next few winter months, as development of economic situation is unlikely to trigger a change even only in wording of the MPC, monetary policy outlook in Poland for the next year is very interesting and highly uncertain.
The Polish MPC kept interest rates on hold at all-time low level. The NBP reference rate will stay at 2.50%. While such a decision on rates was widely expected, the key focus of attention was whether the Council will extend period in which the key policy rate in Poland is going to stay unchanged.
CPI inflation surprisingly dropped in September, confirming our view that the key policy rate in Poland is likely to stay unchanged at all-time low until the second half of 2014.
While the Polish central bank has been quite well known for misleading communication and unpredictable actions, now its monetary policy becomes boring. However, although message from the Polish MPC is very clear that rates will remain unchanged at least until the end of 2013, it offers no hint what next.
Monetary Policy Council is back from holidays and gathers next week after summer break in August. Will Polish rate-setters give in to continued pressure from finance minister and suggest that rate cuts could be resumed. Or maybe they will adopt more hawkish rhetoric and threaten that FX interventions could be launched in face of the recent PLN weakness?
Output figures for July came in better than expected, confirming that the Polish economy has entered the recovery path. The data support our view that monetary easing in Poland has been definitely ended and the next move in the key policy rate will be a hike during 2014. Cyclical recovery of the Polish economy is supportive for the PLN, but the key driver for the currency is still impact of prospects for QE3 tapering on performance of bond markets.
Output figures for June proved stronger than expected. This is strongly for the recent decision of the Polish MPC to end rate cuts and change policy bias from easing to neutral. The data are also positive for the PLN.
Rząd ogłosił wczoraj decyzję o nowelizacji tegorocznego budżetu. Wynika to ze słabszych od zakładanych wyników gospodarki i ma na celu umożliwienie zadziałania finansów publicznych jako automatycznego stabilizatora koniunktury. Negatywnym aspektem planowanych zmian jest podważenie kolejny raz wiarygodności progów ostrożnościowych dla długu publicznego.
The government decided to revise 2013 budget. This results from weaker than expected performance of the economy and is aimed at letting automatic fiscal stabilizers working. The negative aspect of the changes is that the government yet another time undermines credibility of prudential limits for public debt.
Poland’s inflation reached the lowest level in history in June, but in our view this is highly unlikely to change central bankers’ opinion that monetary policy easing in Poland has come to an end.
Inflacja CPI spadła w czerwcu do najniższego poziomu w historii. Czy oznacza to zmianę perspektyw krajowej polityki pieniężnej?
Emerging Markets currencies have weakened substantially in the past month, when the markets took on the risk-off mode. This is just what the EM central banks desire and have tried to push for. We expect this to remain the pattern for the near future.
The Polish central bank cut interest rates by 25 bps at its meeting today. The key policy rate now stands at fresh all-time low of 2.75%. Post-meeting statement and comments at press conference have given some hints at next policy actions - with implications for the PLN.
The recent flow of activity indicators and turmoil in the financial markets means that the Polish central bank will have a tricky dilemma when deciding on rates this week.
Poland’s GDP figures for Q1 came in on the weak side of expectations. What does it imply for the PLN and next actions of the Polish central bank?
The Polish central bank cut interest rates by 25 bps today, with the key policy rate now at fresh record low of 3%. The move was in line with our latest prediction, but against market consensus pointing to no policy change. What next?
Against the background of light calendar of market-sensitive events on the global markets, the key focus of attention in the Polish market will be on the MPC meeting with decision announcement due on Wednesday. We have changed our view and now we expect the Polish central bank to resume interest rate cuts.
Output figures for March confirm that the worst for the Polish economy is over and it has escaped recession again. The data are not a factor, which could help to build majority in the MPC for another rate cut already at the next meeting in early May. However, given uncertainty regarding the economic recovery later this year, one cannot exclude some fine-tuning policy easing in June-July.
The Polish MPC kept rates on hold at record low level. Wording of the post-meeting statement and comments at the press conference was not as dovish as some market participants expected, which provided a lift for the PLN.
Along with the larger than expected 50bps rate cut last month, the Polish MPC has shifted into wait-and-mode. Domestic data released over the past month were mostly on the soft side. Does it mean that monetary policy easing in Poland will be continued?
Poland’s Prime Minister Donald Tusk took a big political gamble yesterday, opening the door to a referendum on euro adoption amid record strong public opposition to the single currency. Does it mean that we are going to see a major expansion of the Euro area soon (Poland would become the 6th largest economy in the single currency bloc)?
Output figures for February came in broadly in line with expectations. The numbers confirm the ongoing economic slowdown, but at the same time suggest the worst is over for the Polish economy and with tailwind provided by a rebound in Germany the EU’s largest Eastern economy is likely to see a shy recovery within a few months. How do the figures affect monetary policy outlook and the PLN?
Poland's CPI inflation for February came in lower than expected. Does it mean the Polish central bank will continue monetary policy easing, even despite it has adopted the "wait-and-see" mode recently? Stronger than expected data on exports has muted negative impact on PLN coming from lower than expected inflation.
The Polish MPC surprised the market, delivering 50 bps rate cut at its meeting in March while a modest move by 25 bps or no cut had been expected. Does it herald start of more aggressive monetary easing in Poland and thus PLN weakness?
GDP growth in Q4 slowed, but less than expected. Together with the recent high frequency domestic data and promising activity indicators from Germany (Poland's key export market) this supports our view that the Polish economy is nearing the bottom while monetary policy easing is coming to an end. PLN positive.
Industrial output figures for January have beaten the most optimistic forecasts, which together with stronger-than-expected German ZEW index released earlier today, heralds better times for the Polish economy going forward. PLN gained on the data and swap curve moved up. Will the Polish central bank continue monetary policy easing?
Deeper than expected inflation drop in January adds to pressure on conservative majority at the Polish rate-setting panel to continue policy easing, despite a nearing pause in rate cuts suggested by them earlier this year.
Polish central bank cut rates for the fourth month in a row in an attempt to reinvigorate the ailing economy. The decision was fully in line with expectations, but message in the post-meeting statement and during press conference was more hawkish than expected (again), strengthening the PLN and driving market rates higher. What's next for Poland's monetary policy?
We expect that the Polish central bank will continue policy easing with 25 bps rate cut tomorrow. The key focus of attention will be on the post-meeting statement and comments at the press conference in search for hints at future policy actions. How far will Polish rate-setters go with rate reductions? Can monetary policy prospects in Poland be affected by a possible reshuffle of the MPC?
Slowdown of the Polish economy in the final quarter of last year proved somewhat less pronounced than feared. Moreover, breakdown of the GDP growth is supportive to our relatively constructive view on the Polish economy for 2013. We read the data as neutral for monetary policy expectations and not good enough to remove short-term pressure on the PLN weakening.
At the press conference following MPC meeting last week, head of the Polish central bank, Marek Belka, said that data for December published in January would be “nasty”. A bunch of macro figures released in Poland today actually proved to be “nasty”. What does it mean for prospects of the Polish economy, interest rates and the PLN?
The headline inflation rate in December dropped below the target for the first time since August 2010, somewhat reviving expectations for further monetary easing in Poland and supporting our view for two next rate cuts in February and March.
The Polish MPC cut interest rates for the third time in a row today by 25 bps. As some market participants expected a bolder move by 50 bps and given less dovish message at the post-meeting press conference, PLN gained and market rates went up considerably.
Government’s officials keep pushing on the Polish MPC to quicken rate cuts and help the slowing economy. Will Polish central bankers deliver 50 bps cut next week?
Industrial output figures for November disappointed, adding to list of arguments for next interest rate cuts.
GDP growth in Poland slowed down more than expected in Q3. We think this will encourage Polish central bankers to deliver more rate cuts than they have suggested so far, but it should not put much negative pressure on the PLN.
Over the past few years, Poland has been perceived as an oasis of political stability with one of very few governments in Europe, which survived elections during the crisis. However, over the last weekend the junior coalition party (PSL) surprisingly changed its leader. Does it mean that the country faces a political storm?
CPI inflation returned to the target range for the first time since December 2010, supporting our view that next interest rate cut of 25bps in possible already next month.
Paradox of risk: it is highest exactly when it seems it is lowest. FX markets are to catch the cold soon...
RPP wreszcie zdecydowała się na pierwszą obniżkę stóp procentowych. Biorąc pod uwagę długie odwlekanie przez członków Rady decyzji o rozpoczęciu łagodzenia polityki pieniężnej, można stwierdzić jedynie, że lepiej późno niż wcale. Naszym zdaniem proces redukcji stóp procentowych będzie kontynuowany i spodziewamy się kolejnych obniżek po 25 pb w grudniu i styczniu. Niemniej, biorąc pod uwagę ostatnie informacje, wskazujące na poprawę perspektyw inflacji dostrzegamy coraz większe prawdopodobieństwo, że łączna skala redukcji stóp będzie większa niż 75 pb.
The Polish MPC reduced interest rates by 25bps. Given reluctance of Polish central bankers to respond earlier to threats to economic growth, one could say better late than never. We think the monetary easing in Poland will be continued with two more steps by 25bps in December and January. However, given the recent news improving inflation outlook, we see increasing probability that reduction in rates will be larger.
Industrial output growth in September dropped for the first time since late 2009, confirming clear slowdown of the Polish economy. Will the MPC keep waiting with the first interest rate cut and the PLN remain in the appreciation trend?
CPI inflation in September proved lower than expected, strengthening expectations for start of monetary easing in Poland. The PLN found some support in better than expected balance of payments data, which offset negative impact of low CPI reading.
Polish Prime Minister Donald Tusk gave a long-awaited policy speech today, outlining how the country is going to keep economic growth and fiscal discipline at the same time.
The Polish central bank decided to keep interest rates unchanged today against expectations of a 25bp rate cut. Based on the weakening economy we expect the first rate cut in November, and see the policy rate hitting bottom at 4.00% by mid-2013.
Industrial output growth slowed down stronger than expected in August, strengthening expectations for an interest rate cut and negatively affecting the PLN.
CPI figures for August showed that inflation softened a bit, but this is not enough to trigger the first interest rate cut already in October.
The Polish MPC kept interest rates on hold, but wording of the post-meeting statement and comments at the press conference signal that the first rate cut is just around the corner.
GDP growth in Q2 slowed down much stronger than expected, adding to depreciation pressure on the PLN and strengthening expectations for interest rate cuts.
Industrial output growth rebounded in July, but the downward trend remains intact and other domestic data confirm expectations for slowdown of the Polish economy. How can it affect the PLN and Polish rates?
Following GDP figures for Q1 released in late May, we have written that the Polish economy has started a long way down. Output figures for June revealed today indicate that it is becoming an increasingly fast way down.
CPI inflation surprised on the upside in June, even despite little evidence of price effects of Euro 2012. This provides some support for hawkish camp at the Polish MPC.
Wording of Polish central bankers has become less hawkish, as they are increasingly worried about economic growth prospects. When will the first rate cut be possible?
Emerging Markets-valutaer: Sommerstilheden er ved at indfinde sig ”Life after the storm” var en god overskrift på vores maj-udgaven – faktisk er volatiliteten i EM-valutaerne faldet, og valutaerne begyndte at rette sig i juni. De europæiske problemer er endnu ikke …
Sluggish output growth coupled with clear drop in inflation (both CPI and core) strengthens dovish faction at the Polish MPC.
Even though Poland cannot entirely escape the fallout from the Euro area crisis, it can hold its own better than most of its peers. However, this does not help the PLN, which remains at the mercy of global factors.
The Polish MPC kept rates on hold and wording of Polish rate-setters indicates the most likely scenario is no change in monetary policy parameters until the year-end.
On Wednesday, the Polish central bank will announce its decision on rates, just two days before the opening game of the Euro 2012 in Warsaw. Could the MPC surprise again as it did last month by raising borrowing costs?
Drop in Poland’s PMI for May was weaker than expected, which confirms the Polish economy remains quite resilient to negative external developments. However, resilient does not mean isolated.
Following surprising acceleration in the final quarter of last year, Poland’s economic growth has finally slowed down in early 2012, and there is more slowdown ahead.
The storm did come after the calm, as our April issue of the Monocle suggested. It may get worse before it gets better in the coming weeks, but not for long.
Output growth in April slightly accelerated, but this is largely due to statistical factors.
CPI figures for April surprised the market on the upside.
Following the good start of the year, EM currencies did not hold on to the gains. Yet the orderly gradual EM FX decline has not produced much volatility creating the impression of a bomb waiting to explode if only another “black swan” event strikes.
Economic activity indicators have shown that the Polish economy is finally losing momentum, but the slowdown this year will not be dramatic.
We are turning more optimistic on the Polish economy. The resilience so far has been surprising and now the risks coming from abroad seem to be reduced. Stronger PLN and rate cuts in the second half of the year.
GDP data for Q4 2011 were broadly in line with estimates based on earlier released tentative data for 2011 as a whole. We have decided to revise our GDP growth forecast for Poland for this year (to 3.1% from 2.5%).
Until the end of 2011 it has not seemed strange that the Polish central bank sounded hawkish, despite gloomy economic prospects related to Euro-area debt crisis.
Most of the factors that made Poland quite immune to the first wave of the global crisis will work also this time.
Zloty hurt by higher risk aversion - ...and growing concerns about CEE - Potential risk on the horizon