Polish forwards now expect less than 25 bps of rate cuts over the next 3–6 months. At the start of February, they expected more than 25 bps. This change came after the February National Bank of Poland (NBP) rate meeting.
Members of the Monetary Policy Council (MPC)—including Ludwik Kotecki, Gabriela Maslowska, Przemyslaw Litwiniuk, and Henryk Wnorowski—have said there is a high chance of a 25 bps cut at the next meeting. They pointed to a better inflation outlook.
Policy Path After March
After March, there is more debate about where policy goes next. Fewer MPC members now talk about a 3.25% terminal rate. Some have suggested there may be only one 25 bps cut, which would imply a 3.75% terminal rate.
Governor Glapinski previously pointed to a 3.50% terminal rate, while other members have discussed more cautious paths. Commerzbank expects the terminal rate to end up below 3.50%.
If that happens, the zloty may lag its CE3 peers for a few months. The article also notes it was produced with an AI tool and reviewed by an editor.
Forward markets are pricing in less than a 25 bp cut from the NBP, even though several MPC members say a cut in March is likely. This gap between market pricing and central bank messaging suggests an opportunity. We see the dovish tone as a strong sign that a rate cut is close.
Implications For Zloty Positioning
The case for a rate cut is supported by recent data. Inflation in January 2026 fell to 3.1%, down from 3.9% in Q4 2025. At the same time, Q4 2025 GDP growth slowed to 2.2%. Together, these figures give the NBP room to start easing policy to support the economy. This makes the MPC’s dovish messaging look more believable than current market pricing suggests.
With this outlook, we expect the Polish zloty to underperform for a period. Markets may be underestimating how willing the NBP is to cut rates—not only in March, but potentially beyond that toward a terminal rate below 3.50%. That creates a supportive backdrop for strategies that expect a weaker zloty.
For derivatives traders, this argues for positioning for PLN weakness versus its CE3 peers, where central banks are expected to ease more slowly. One idea is long positions in pairs like Czech koruna versus zloty (CZK/PLN). Options that benefit from a higher EUR/PLN—such as buying call spreads—may also look attractive over the next several weeks.
This possible shift matters when we look at what the NBP did last year. For most of 2025, it kept the reference rate at 4.00% while waiting for clear proof that inflation pressures were fading. That makes the March meeting more than a one-off decision. It could be the start of a new easing cycle that markets have not fully priced in.
Create your live VT Markets account and start trading now.
here to set up a live account on VT Markets now
