Polish Zloty’s Pivotal Plunge: NBP Eyes Rate Cuts Amid Economic Data Shifts

Key Points

1. The Polish Zloty has weakened significantly, reflecting changes in Poland's economic landscape and influencing the NBP's monetary policy considerations.

2. Key economic indicators show CPI inflation dropping to ~6.1% YoY from ~10.1%, GDP growth slowing to ~0.5% YoY from ~2.0%, and industrial production declining further to ~-2.5% YoY.

3. The NBP, which maintained a hawkish stance to combat inflation, is now considering rate cuts due to cooling economic conditions and reduced inflationary pressure.

4. External factors, such as Eurozone economic conditions and global market trends, also impact Poland's economic outlook and the NBP's policy decisions.

5. Analysts predict near-term pressure on the Zloty if the NBP cuts rates, but medium-to-long-term stability could emerge if inflation is controlled and EU funds flow consistently.