As widely expected the National Bank of Poland extended its already record long period of stable interest rates by keeping the main policy rate unchanged at 1.50% at yesterday’s meeting, explains the research team at Rabobank.

Key Quotes

“With inflation well below the official target of 2.5%, governor Glapinski reiterated his commitment to a wait-and-see bias that Polish rates should stay on hold for a prolonged period of time, possibly until the end of 2019. Effectively, the NBP dismisses the potentially inflationary impact of the recent depreciation of the zloty, while the economy continues to expand rapidly at 5.1% y/y in the first quarter. Our colleague Piotr argues that this could leave the zloty vulnerable against the US dollar, which is currently supported by rising US bond yields amid expectations that the Fed is set to raise rates three or four times this year.”

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