The NBP still expects stable official rates

The minutes from the latest meeting of the National Bank of Poland brought no significant news yesterday. The Monetary Policy Council (MPC) still sees stable rates as the most likely scenario despite the fact that the economic growth will likely be somehow slower than had originally been anticipated. Let us recall that stability of the Polish official rates in 2017 is our base case scenario as well. Still, the zloty weakened against the euro by about 0.5% during the day.

In the meantime, the Czech koruna remains glued to the Czech National Bank’s (CNB) intervention floor (EUR/CZK 27.0) while EURCZK forwards have fallen considerably over the past few weeks as markets prepare on the exit from interventions. From the point of view of timing of the exit, yesterday’s ECB meeting did not bring substantially new information. It is however important to keep in mind that the CNB is currently preparing its new economic projection (that will be released on 3rd November) in which the CNB assumes the ECB will terminate its QE programme at the end of March (with no tapering). Therefore, should the ECB eventually (i.e. at December’s meeting) extend the QE (which cannot be ruled out), this would mean that the exit may also be postponed towards the end of next year.

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