ING economists Rafal Benecki and Adam Antoniak have highlighted that the Polish Zloty (PLN) faces increased downside risks due to concerns over a potentially more dovish stance from the National Bank of Poland (NBP) [1]. They note that the reduced likelihood of further monetary tightening by the European Central Bank (ECB) and the Federal Reserve (Fed) should alleviate some external pressure on the Zloty [1]. However, the FX market remains cautious, as any softening in the NBP's rhetoric is viewed as negative for the PLN [1].
The economists contrast the situation in Poland with Hungary, where the National Bank of Hungary's dovish tone has not significantly impacted the forint, which continues to benefit from strong convergence dynamics [1]. In Poland's case, with euro adoption still considered a distant prospect, the Zloty is seen as more vulnerable to shifts in central bank communication [1].
ING suggests that while NBP Governor Adam Glapiński may adopt a somewhat dovish tone at the upcoming Thursday press conference, substantive discussions about potential rate cuts are expected to intensify only after the summer [1]. No specific market reactions or analyst forecasts regarding the Zloty's immediate movement were provided in the source article.
CONCLUSION
Market participants are increasingly wary of a dovish shift by the National Bank of Poland, which ING economists believe could weigh on the Zloty. While external pressures may ease, the PLN remains exposed to domestic monetary policy signals, with key debates on rate cuts likely to emerge later in the year.