The zloty exchange rate extended its underperformance late last week. This trend is set to last as long as inflation continues to be a worry, according to economists at Commerzbank.

Dovish remarks by NBP governor

“NBP governor Adam Glapinski sent overly dovish signals at his monthly press conference. Glapinski summarised that Poland is nearing peak interest rates and that the MPC might forgo further hikes if inflation were to show any sign of peaking in the summer.”

“Ultimately, NBP’s monetary stance will more likely follow whatever inflation trend materialises, not Glapinski’s fixed guidance.”

“The exchange rate will likely extend its underperformance for as long as inflation continues to be a worry.”