Polish Zloty: Policy divergence weighs on PLN against Euro – ABN AMRO

ABN AMRO’s Georgette Boele highlights that EUR/PLN has risen as interest rate expectations diverge between the Eurozone and Poland. The National Bank of Poland kept rates at 3.75% and appears divided on a possible 25bp cut after summer, while ABN AMRO expects the ECB to hike once more to a 2.5% deposit rate. This policy divergence has led the bank to upgrade its EUR/PLN forecasts.

NBP and ECB on different paths

"Since the start of June, the Polish złoty has fallen by 3% against the euro."

"Interest rate expectations in the eurozone and Poland have been an important driver for direction in EUR/PLN."

"Expectations that the NBP and the ECB will move in opposite directions have pushed EUR/PLN higher, meaning a weaker złoty."

"We have upgraded our EUR/PLN forecasts to reflect this policy divergence for this year."

"If the NBP sounds more dovish than expected, EUR/PLN could move towards 4.40."