Societe Generale’s Central and Eastern European (CEE) strategy team anticipates that the National Bank of Poland (NBP) will maintain its policy rate at 3.75% during today's meeting, with Governor Glapiński expected to highlight inflation risks and prepare the market for a potential rate hike in November, coinciding with the release of updated staff forecasts [1]. Inflation in Poland accelerated above the upper band of the NBP's tolerance range at 4% in September, reinforcing the likelihood of a hawkish stance from the central bank [1].
The Polish Zloty (PLN) has experienced continued weakness, with the EUR/PLN currency pair extending its upward movement after surpassing the July/August peaks at 4.34. The pair is now approaching the upper boundary of a multi-month ascending channel at 4.40/4.41, which is identified as an interim resistance zone [1]. Societe Generale notes that a move above this level could trigger a larger uptrend towards 4.45 and 4.48, while the August peak at 4.34 may serve as key support; a break below this would indicate the risk of a deeper decline [1].
Despite the prospect of a hawkish NBP stance providing some support to the zloty, Societe Generale expects EUR/PLN to remain above 4.35 due to ongoing geopolitical and external risks [1]. The market is closely watching for signals from Governor Glapiński, who is likely to express growing concern over inflation and set the stage for further tightening in November [1].
CONCLUSION
Societe Generale expects the NBP to hold rates at 3.75% but sees a hawkish tone and possible November hike as likely, given rising inflation. While this stance may offer some support to the zloty, persistent risks suggest EUR/PLN will remain elevated, with technical resistance seen at 4.40/4.41 and potential for further upside.