Cut Bets Trap Polish Zloty as NBP Holds Rates at 3.75%

3.75% is not enough to shield the Polish zloty if traders believe the National Bank of Poland is already preparing the market for cuts.

ING’s Frantisek Taborsky expects the NBP to keep rates unchanged at 3.75% through year-end, but the zloty is still under pressure because the market is trading the next policy move, not the current one, according to FXStreet. That is the tension behind the latest EUR/PLN move toward 4.29-4.30: a hold can still read as dovish if investors think policymakers are waiting for permission to cut.

The Polish zloty is paying for a 3.75% rate that markets think can fall

ING’s baseline is simple: the NBP leaves rates at 3.75% today and keeps them there until the end of the year. The more important signal comes from the new NBP forecast, the statement, and Governor Adam Glapiński’s press conference.

Taborsky’s core point is that the easing cycle has not been abandoned. It has been delayed.

"The National Bank of Poland will likely leave rates unchanged at 3.75% today, which is our baseline until the end of the year. More interesting today will be the new NBP forecast and statement and tomorrow's press conference."

That distinction matters for the Polish zloty. If the NBP presents the hold as an inflation-defense stance, PLN gets support. If it presents the hold as a pause before cuts, investors can start discounting lower future yields.

XOOMAR analysis: the zloty’s vulnerability is not about the level of rates alone. It is about whether the market believes those rates are politically and economically durable. ING’s note suggests that confidence is thin.

Core inflation near 3% is the obstacle to faster PLN repricing

The NBP’s problem is that disinflation has not been clean enough to justify easy confidence. ING says the drop in headline inflation has largely reflected normalising oil prices and unexpectedly sharp declines in food prices. That helps the near-term inflation picture, but it does not settle the policy debate.

The stickier issue is core inflation.

"Core inflation remains close to 3%. Moreover, fiscal measures aimed at reducing petrol and diesel prices, including lower excise duties and VAT rates, expired at the end of June, pushing fuel prices higher at the start of July."

That creates an awkward timing problem. The July macroeconomic projection may show a favorable medium-term inflation path, but ING argues policymakers will need several months to confirm that energy or supply-chain shocks are not producing delayed effects, especially through core CPI.

The market is already leaning in the other direction. ING says traders are pricing around 10bp of rate cuts after pricing out several rate hikes in recent weeks. That shift narrows the rate differential and weakens PLN’s carry appeal.

For readers tracking rate-sensitive FX elsewhere, XOOMAR has covered similar cross-asset mechanics in ECB June Rate Hike Leaves Traders Guessing on July and RBNZ Rate Hike Knocks AUD/NZD Lower as Kiwi Grabs Edge. The Polish case is narrower: ING ties the latest zloty pressure directly to the NBP rate-cut debate, front-end rates, a stronger US dollar, and recent EUR/PLN gains.

A dovish NBP turns a rate hold into a PLN risk event

A central bank can hold rates in two very different ways. One version tells markets that policy remains tight until inflation is convincingly beaten. The other tells markets that cuts are coming as soon as the data gives cover.

ING’s wording points to the second risk. Taborsky says Glapiński may strike a somewhat dovish tone, while the debate over potential rate cuts is likely to gather momentum after the summer.

That matters because FX markets punish uncertainty before policy actually changes. If investors suspect the NBP wants lower rates, they do not need to wait for the first cut. They can sell PLN now, especially if the dollar is stronger and Central and Eastern European peers are holding up better.

ING is explicit on that regional comparison:

"The narrowing rate differential and outperformance of front-end rates vs CEE peers, together with a stronger US dollar, have led to pressure on the zloty, which has underperformed CEE peers in recent weeks."

XOOMAR analysis: this makes the Polish zloty trade less like a high-rate currency and more like a policy-risk currency. The question is not just "where are rates today?" It is "how fast will the NBP let the market price cuts?"

EUR/PLN at 4.29-4.30 puts the central bank back in the trade

ING flagged 4.290-300 EUR/PLN as the area where the central bank’s next signal would matter. The pair has moved into that zone.

"We focused a lot on the zloty last week here and mentioned that after reaching 4.290-300 EUR/PLN the central bank will decide on the next direction."

That is a revealing line. ING is not saying the NBP controls the exchange rate point by point. It is saying the market has reached a level where central-bank language can either stop the move or validate it.

If the NBP avoids pointing to cuts this year, EUR/PLN may lose some upward pressure. If it hints that cuts remain live in 2026 once inflation confidence improves, ING sees further upside for EUR/PLN.

The zloty’s issue is amplified by the dollar. ING cites a stronger US dollar as one source of pressure. XOOMAR has also tracked dollar-driven FX stress in Japanese Yen Skids Toward 40-Year Low as Dollar Bites, though the PLN setup depends more directly on NBP communication than on dollar strength alone.

Exporters, households, bond buyers, and Warsaw face different PLN trade-offs

The source does not give sector-level reactions, so the stakeholder read has to stay conditional.

For exporters, a softer zloty can help foreign-currency revenues when costs are local. For importers and consumers exposed to foreign-priced goods, PLN weakness can work in the opposite direction, especially if fuel prices are already rising after temporary fiscal measures expired at the end of June.

For households, the trade-off is familiar but uncomfortable. Rate cuts would ease borrowing pressure if they arrive, but a weaker currency can slow the return of purchasing power if it feeds imported price pressure.

For bond buyers, the core question is cleaner: does Poland offer enough real-yield compensation if the NBP is preparing cuts? ING’s note says the market has shifted from pricing possible hikes to pricing about 10bp of cuts. That is not a huge number, but the direction matters. FX-adjusted returns can deteriorate quickly when a currency is weakening and front-end rate support is fading.

For the government, the same tension runs through the policy mix. Lower rates can support growth and reduce financing pressure, but a sharper currency move risks complicating the inflation story the NBP is trying to validate.

The next PLN break depends on when the NBP stops saying “confidence” and starts naming cuts

The near-term base case is not a zloty collapse. ING’s baseline still has rates at 3.75% through year-end, and policymakers want more confidence on inflation before restarting easing.

But PLN rallies look fragile if the NBP keeps letting the market believe cuts are only delayed. The bullish zloty scenario needs inflation data or central-bank language that forces traders to push cuts further out. The bearish scenario is cleaner: a favorable inflation projection, dovish guidance, and more market confidence that easing can resume after summer would likely keep EUR/PLN biased higher.

The trigger is language. As long as the NBP says it needs several more months of evidence, the zloty can range trade around the debate. Once policymakers signal a more specific window for easing, the market gets something firmer to price.

The zloty’s problem is not 3.75%. It is the growing belief that the NBP wants that number lower as soon as it can justify the move.

Disclaimer: This XOOMAR analysis is for informational and educational purposes only. It is not financial, investment, legal, tax, or professional advice. It does not provide buy, sell, hold, price-target, portfolio, or personalized recommendations. Verify information independently and consult qualified professionals before making decisions.

The Bottom Line

• The zloty can weaken even if rates stay unchanged when traders expect future cuts.
• NBP communication may matter more than the 3.75% rate decision itself.
• EUR/PLN near 4.29-4.30 shows markets are already pricing policy uncertainty.