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NBP to remain on hold tomorrow – TDS

FXStreet (Edinburgh) - Strategist at TD Securities Cristian Maggio expects the NBP to leave unchanged its benchmark rate at 1.5% at tomorrow’s meeting.

Key Quotes

“In Poland on Wednesday we have the NBP rate decision, In line with the unanimous consensus we expect the policy rate to be kept on hold at 1.5%”.

“Headline inflation is expected to move slowly upwards in the coming quarters from -0.5% Y/Y in November, but a move into positive territory this year, as Governor Belka has been predicting, looks unlikely, and anyway current NBP forecasts still see inflation below the 2.5% target at the end of 2017”.

“However, the MPC sees the prolonged period of low inflation as being due to “factors beyond the reach of domestic monetary policy, among others, low commodity prices and low price growth abroad.”

“Furthermore growth continues at a brisk pace (3.5% Y/Y in Q3), which should cause the output gap to gradually close. So we think the MPC will keep rates on hold into the New Year”.

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