- Probability of a rate hike in Poland rises
- CNB Governor: Czech rates will stay unchanged
The Hungarian forint led losses of Central European currencies on Monday and in intraday trading even hit EUR/HUF 300 level for the first time since mid January 2012. Meanwhile, the Czech koruna flirted with 55 days moving average and the zloty breached EUR/PLN 4.20.
Regarding Poland, two members of the Monetary Policy Council (MPC) indicated their stance towards monetary policy yesterday. Both Jan Winiecki and Jerzy Hausner said that current interest rates might be to low to bring inflation back to target. Hence, they echoed similar comments of their fellow MPC members Andrzej Bratkowski and Andrzej Rzonca. Moreover, Bloomberg cited Anna Zielinska-Glebocka saying that forthcoming data will be enough to make an informed interest rate decision. Thus, we maintain our view that the rate hike might come as early as at the next meeting in May.
Still, we view such a move by the NBP rather as a token gesture – because the price rise, just like in other countries across the globe, is being primarily driven by commodity prices. However, the NBP likely wishes to indicate to markets that inflation is an actual priority for the central bank, and does not want to open up space for any discussions about this. The hawkish conclusions from the latest meeting have on their own basically eliminated the previously evident bets on a rate cut at the end of this year, and the act of a rate hike itself should reassure markets of the NBP credibility.
On the contrary, the head of the Czech National Bank Miroslav Singer said yesterday that Czech interest rates were “relatively unlikely to go up” a foreseeable future.