The latest remarks from the National Bank of Poland (NBP) provide EUR/PLN with further support. Economists at Rabobank notes the preference to keep the pair above the 4.40-4.50 zone.
“The NBP shut the door for EUR/PLN to fall in the short-term by explicitly saying that it may intervene in the FX market in order to strengthen the impact of its monetary policy easing on the economy. Essentially, the NBP does not want a stronger zloty.”
“Until uncertainties related to the path of the pandemic substantially diminish, the preference to keep EUR/PLN above the 4.40-4.50 area is likely to prevail at the NBP. This means that the scope for EUR/PLN to fall should remain limited in the first half of 2021 or longer depending how quickly Poland will be able to vaccinate a sufficient percentage of citizens to fully reopen the economy.”
“While the NBP favours a weaker currency, prolonged FX interventions to curb zloty’s gains may have negative consequences. Poland could be labelled a currency manipulator and its strategy could lead to a full-scale currency war in the CEE region.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.