Poland | NBP reaffirms its hawkish turn

The National Bank of Poland (NBP) hiked its policy rate by 75bps to 1.25% at yesterday’s meeting. Although some tightening was expected, the magnitude surprised both us and consensus.

What you will learn:

• The decision came against the backdrop of another upside surprise in inflation, which accelerated to a twenty year high of 6.8% in October, up 0.9ppts from September.
• Although interest rate hikes will do little to ease near-term inflationary pressures, the NBP, after staying put for too long and failing to communicate its plans to the markets, seems to be pursuing a more aggressive tightening path.
• With NBP’s communication still extremely vague, the pace of next hikes is uncertain.