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Thursday, October 21, 2021

Interest rates up, MPC decision. The zloty exchange rate to the euro, bank quotations on the WSE: PKO BP, Pekao, Santander

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After the announcement of the Monetary Policy Council’s decision on interest rates, the zloty appreciated against other currencies. Even before 12.00 one euro you had to pay PLN 4.63, and in the evening PLN 4.55. Bank shares gained on the Warsaw Stock Exchange on Wednesday.

Apart from strengthening versus the euro, the zloty was also gaining versus the dollar. You have to pay PLN 3.94 for the American currency around 8.00 p.m., compared to PLN 4 before 12.00. The Polish currency also gains versus the Swiss franc and the British pound.

Strengthening of the zloty – experts’ comments

“We are skeptical that today’s rate hike will trigger a strong downward move on the EUR / PLN exchange rate (PLN appreciation – PAP). This is partly due to the fact that in our opinion the central bank will not be much more hawkish, also because that he sees inflation more as a problem outside the sphere of monetary policy influence, “Danske Bank commented.

“Secondly, the market is pricing in an interest rate increase to 2 percent or even full normalization over the next year. It would be a challenge if a slowdown in the global industry cycle would weaken growth in Poland, to which the MPC attaches great importance” – added.

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Experts from Danske mentioned the expected appreciation of the USD as another factor limiting the appreciation pressure on the zloty.

“We remain moderately positive about the zloty, with the possibility of a stronger strengthening in the short term,” they concluded.

According to ING, Wednesday’s MPC decision significantly changes the outlook for the zloty.

“(…) We assume that investors will be pricing in further decisive rate hikes in the country, similarly to the Czech Republic or Hungary. Nevertheless, the statement after the meeting suggests that the NBP may use currency interventions to limit the appreciation of the zloty. unfavorable sentiment for emerging market currencies may also dampen the strengthening of the zloty. Therefore, we expect that at the end of the year the EUR / PLN pair will be relatively close, although rather below 4.50 “- added.

Banks are gaining in the stock market

The banking index, which initially lost 1.5 percent, ended the session by 3.6 percent. growth. Outside of it, telecoms, construction and chemicals grew slightly.

The highest turnover was recorded by PKO BP (PLN 176 million), which at the end of the day increased by nearly 2%, improving the 3-year maximum to PLN 46.

The remaining banks in the index grew even stronger and also recorded new 3-year highs. Santander went up 5.7 percent. up to PLN 340, and Pekao by 2.3 percent. up to PLN 114.4.

Banks were also the leaders in the group of medium and small companies in terms of growth. The leader was mBank, which increased by 9.4 percent. to PLN 464 and has been in the last 2 years. The new multi-annual peaks were also marked by an increase of 7 percent. Millennium and BOŚ, as well as Alior rising by approx. 5 percent. ING gained 6 percent. and closed the quotation at the historical level of PLN 260 per paper.

At its one-day meeting on October 6, the Monetary Policy Council unexpectedly raised interest rates – the reference rate by 40 bp to 0.50%, the Lombard rate by 50 bp to 1.0%, the rediscount rate by 40 bp to 0.51%, the discount rate by 40 bp to 0.52% The MPC kept the deposit rate at 0.0%.

NBP reference ratePAP

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