KBC Market Research Desk
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Yesterday’s meeting of the Monetary Policy Council (MPC) of the National Bank of Poland (NBP) had some potential to be an eye-catcher. However, neither the decision nor the following press conference brought game-changing surprises. The MPC left interest rates unchanged at an all-time low of 2.5 percent and indicated it would stay there for the rest of this year (the same phrase as at the previous meeting). This note might have disappointed some market players who were betting on a longer-term “commitment” as the zloty gained about 0.4 percent after the meeting.
We still believe that the Polish official rates may stay at current levels till the end of the second quarter next year. In this respect slightly less dovish (than expected) comments from the MPC are not that surprising if we take into account slightly hawkish bias of the MPC and signs of recovery visible in recent data, especially in case of manufacturing (about 18 percent of gross value added). Moreover, the September PMI manufacturing data released earlier this week confirmed that the outlook for this sector remains positive (the PMI employment sub-index showed major improvement which has been promising with respect to still weak household consumption). Thus, the softest spot in the Polish economy continues to be construction, but even in this case there have been signs of recovery (especially in construction of buildings).
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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