On Tuesday, the Central European currencies saw a calm trading. While the zloty and the koruna barely changed their exchange rates, the forint gained about 0.5
percent and thus took back some previous losses.
The release of December inflation figures in Poland was probably the most awaited news of yesterday. At 2.4% year-on-year, inflation came out just a touch
lower than expected and therefore had no significant impact on trading. Regarding structure, slightly higher than expected growth in prices of food and
non-alcoholic beverages appears to be the largest surprise.
In our view, the inflation figure shouldn’t have any significant impact on the central bank’s rate decisions in February - we expect the Monetary Policy Council
to cut rates by 25 bps. Much more telling with respect to future Council’s decisions should be next Friday’s data on wages and industrial production for December. As we have already pointed out, our leading indicators show improving prospects for Polish industry. It will be interesting to listen to comments of Polish central bankers on Friday’s figures as the NBP surprised many investors in January by announcing that the easing cycle was coming to its end.