Polish Zloty: Hawkish talk but weak PLN outlook – Commerzbank

Tatha Ghose at Commerzbank reports that NBP Governor Adam Glapinski presented a hawkish tone but effectively signalled no action until at least Q1, ruling out a December hike. New projections show inflation above target into 2027, even with tax relief. Ghose warns that relying on temporary fuel-price measures risks leaving monetary policy too loose and sees this as negative for the Zloty.
Delayed tightening weighs on Zloty
“Poland’s National Bank (NBP) held its monthly post-meeting press conference yesterday, at which governor Adam Glapinski portrayed the MPC as hawkish, but his practical signal was still one of inaction. He acknowledged a “heated” discussion and said that MPC feared it might have to hike rates, but effectively ruled out December because it is traditionally a “holiday” meeting. This leaves Q1 as the earliest plausible timing for tightening.”
“The new projections undermine the rationale for waiting. If the government were not to extend fuel tax cuts into 2027, CPI inflation would jump to nearly 5%y/y during Q1 and Q2. But, even if the tax relief were to be extended, inflation is still projected to exceed 3.5%y/y during H1 2027 – faster than the upper limit of NBP’s target range. Higher commodity and food prices, elevated PPI inflation and the growing risk of second-round effects reinforce this message.”
“Glapinski cited softer growth, slower wage increases and October inflation returning to target as reasons for the November hold. But, October’s apparent disinflation resulted from temporary administrative fuel-price intervention, not a genuine moderation in underlying inflation. Monetary policy should not remain hostage to government decisions on fuel taxes, power tariffs and protective measures.”
“The zloty is already tanking. Maintaining the monetary policy status quo because of an administered-price-driven dip in inflation will ultimately augur badly for the currency.”
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