After the MPC decision, the Polish currency strengthened. According to an analyst from the Polish Economic Institute, we will have a further upward rally. Next year, the EUR / PLN exchange rate should fall below 4.50, PIE analyst Jakub Rybacki told PAP. He added that Poland, to a lesser extent than the euro area countries, will feel the deterioration in trade conditions resulting from rising commodity prices.
The Monetary Policy Council at its one-day meeting on October 6 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%.
According to Rybacki, the MPC decision and the emergence of expectations for larger increases in NBP interest rates next year led to the strengthening of the zloty against all currency pairs. “We expect the zloty to continue its appreciation – next year the EUR / PLN exchange rate should fall below 4.50,” he indicated.
He stressed that the value of the Polish currency would be strengthened by the rapid growth in economic activity and a solid current account surplus in the balance of payments. He added that Poland, also to a lesser extent than the euro area countries, will feel the deterioration in trade conditions resulting from rising commodity prices.
“It will support the strengthening of the currency in relation to the euro,” he indicated.
Zloty exchange rate
At yesterday’s conference, the NBP president was also asked about assessment of the current zloty exchange rate against the euro and whether the NBP plays for the weakening of the Polish currency against the euro.
– Such a zloty as it is now is OK for our economy. A certain scale of fluctuations in the Polish economy does not hurt – said Adam Glapiński, adding that the Polish economy is strong. – As it is, that is, the free course is completely free at the moment on the market. The Polish economy is such that this course is good and we are able to cope with it – he emphasized. He pointed out that the high zloty exchange rate favors importers, and the low zloty rate favors exporters, but the point is that the exchange rate should be favorable for the entire economy.
– We never act to change course. We act if other factors are causing the rate to move quickly, to slow down the change but not reverse it, he said. He added that the point is that “the market should have time to adjust to the new rate that will be set by the market, not the NBP”.
– Narodowy Bank Polski does not pursue any policy to weaken the zloty. Nor does it lead to empowerment. However, we sometimes warn, for example that the exchange rate is rising and this may be detrimental to exporting companies. And then we intervene to slow down this process – emphasized Glapiński. He added that the central bank was also intervening to stop purely speculative operations in this area.
Interest rates up
The decisions of the MPC have an impact on the wallets of Poles. In the event of an increase in interest rates, borrowers can expect higher loan repayment installments.
Higher interest rates mean at the same time a higher three-month WIBOR, which is most often the basis for the interest rate on mortgage loans in PLN. – WIBOR does not change in exactly the same and at the same time as NBP interest rates, but in a very similar way – Jarosław Sadowski, chief analyst of Expander Advisors, recently explained in an interview with TVN24 Biznes.
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