While the forint reached one-month highs, the koruna once again lagged behind its regional peers. In Poland, the minutes of the last meeting of the central bank Board were published and two Board members commented on the economy and the interest rate outlook.
Andrzej Bratkowski, a dovish member of the Board, called for a significant reduction in interest rates. Meanwhile, Anna Zielinska Glebocka, a swing voter, surprised with her call for further 50-75 bps cuts. The statements pose risk to our scenario of only two more interest rate cuts, in December and January.
Nevertheless according to the minutes the NBP is still split and the December meeting therefore will be quite interesting to watch. The Polish central bankers should have the preliminary 2012Q3 GDP growth rate at their disposal. We estimate the economy to grow only 1.8% y/y - the slowest growth since mid 2009. We expect falling investments in the construction sector and weak consumer spending to be blamed for the growth deceleration. This fact should then move the Board to cut the rates at the next meeting.