In the ever-changing landscape of global finance, the decisions made by central banks play a crucial role in shaping currency movements. In this article, we shift our focus to Poland and examine the recent interest rate decision by the National Bank of Poland (NBP) and its implications for the Polish zloty (PLN). We are joined by Michael Stark, an expert from Exness, who provides valuable insights into the forecast for the PLN in light of the NBP's decision.

The NBP's recent monetary policy meeting held on July 6 resulted in the decision to keep the reference rate unchanged at 6.75%, aligning with market expectations. Looking ahead, there is increasing anticipation of a potential shift in the NBP's stance next quarter, as inflation is projected to return to single digits, possibly as early as October.

The euro-zloty (EURPLN) exchange rate holds a relatively high carry symbol, especially when compared to other tradable European currencies. This, coupled with Poland's strong quarterly GDP performance compared to many other OECD/G20 countries, suggests that EURPLN may continue its downward trajectory in the coming weeks. However, it is important to note that the summer season and associated holiday periods tend to have a clear impact on European symbols, resulting in lower trading volumes.

FXMAG.COM:

Please comment on the NBP / MPC decision on interest rates in Poland and the forecast for the PLN.

Michael Stark, Exness:

The National Bank of Poland kept its reference rate on hold on 6 July at 6.75% as almost universally expected. Participants increasingly seem to expect the beginning of a pivot by the NBP next quarter as inflation is likely to return to single digits, possibly as early as October.

Euro-zloty remains a relatively high carry symbol, certainly as far as tradable European currencies go, so between that and strong quarterly GDP from Poland compared to many other OECD/G20 countries, EURPLN might continue downward in the next few weeks. Conversely, markets have now entered summer, and this season of holidays tends to have the most clear effect on European symbols in terms of lower volume.

The focus for the zloty in the next few days is inflation from Poland on 14 July. Monthly non-core is expected to be nil while the annual figure is seen declining to 11.5%. If the rate of inflation slows more than that, there might be some positivity for EURPLN and possibly the current bounce could continue as traders price in a possible faster pivot by the NBP.