Euro rate dives. Interest rates won't budge, RPP will brake? Experts warn of "risks up for inflation"

Interest rates in Poland. Iran in the spotlight
Euro to zloty rate on Wednesday, May 6

The National Bank of Poland will most likely announce today a decision to keep interest rates unchanged at 3,75%.

Interest rates in Poland. Iran in the spotlight

If the Monetary Policy Council decides to take such a step, for the second month in a row it will refrain from changing interest rates.

The MPC may emphasize the significance of tensions in the Middle East, which in recent weeks have prompted other central banks to tighten rhetoric.

The realization of such a scenario was priced by a team of analysts from ING Bank Śląski.

“In our assessment the Council will maintain a wait-and-see stance but may tighten rhetoric due to the prolonged blockade of the Strait of Hormuz and the persistence of oil prices above $100 per barrel,” was communicated in the statement.

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“Also a higher-than-expected rise in consumer prices in April, driven by core inflation, will translate into cautious MPC positioning. A clearer picture of the impact of the current energy crisis on inflation and economic growth prospects in Poland will be provided by the July macroeconomic projection,” added.

Economists say that turmoil in markets related to the escalation of the conflict between the United States and Iran will be one of the main concerns for the MPC during the May meeting.

“The Council will probably emphasize risks of upward pressure on inflation and signal readiness to tighten monetary policy if inflationary pressure starts spilling over to components of the inflation basket other than fuels,” they said.

“As long as price increases remain focused on fuels, the Council may keep rates unchanged, as domestic monetary policy cannot offset the supply shock in the energy market,” they added.

euro rate dives interest rates wont budge rpp will brake experts warn of risks up for inflation grafika numer 1 ✕

Source: Trading Economics.

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See also: Oil market shock. UAE leave OPEC and OPEC+. Reuters warns of “chaos”

Euro to zloty rate on Wednesday, May 6

The euro to zloty rate on Wednesday, May 6 fell by 0,44% to 4,22 PLN.

Chart. Euro to zloty rate (EUR/PLN)

euro rate dives interest rates wont budge rpp will brake experts warn of risks up for inflation grafika numer 2 ✕

Source: TradingView.

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See also: Dollar rate fell by 20 cents. Iran appealed to the USA. A breakthrough in the Middle East will drive the USD/PLN and EUR/USD rates?

Source: ING Bank Śląski.

FXMAG Team

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