NBP Governor Adam Glapinski said inflation should be close to the 2.5% target this year, and possibly again in 2027. These views are likely to influence the new NBP forecasts due in March. Monetary Policy Council member Przemyslaw Litwiniuk said a March rate cut is quite likely. He also pointed to further possible drops in inflation, linked to changes in the CPI basket and the suspension of the flash estimate.
Litwiniuk said rates should likely fall to 3.50% from the current 4.00%. Market pricing points to a lower 3.25% terminal rate. That differs from NBP messaging, which has focused on 3.50% as the end point of the easing cycle.
Poland Rates And Inflation Outlook
EUR/PLN has traded in a narrow range. It tightened from 4.200–4.230 in January to 4.210–4.230 in February. Risks are seen as slightly tilted below 4.210, but no clear direction is stated.
A year ago, NBP messaging looked clearly dovish, and the case for rate cuts seemed straightforward. Governor Glapinski and MPC member Litwiniuk signalled that rates could fall from 4.00% to a 3.50% terminal rate in 2025. The key reason was the expectation that inflation would move toward the 2.5% target.
At the same time, the market was more aggressive. It priced a terminal rate closer to 3.25%. That reflected confidence in more downside inflation surprises, which would force the NBP to cut faster. The gap between central bank guidance and market pricing created a clear set of risks.
In hindsight, the NBP did start easing, but the sharper cuts priced by the market did not fully happen. Underlying price pressure stayed firm. For example, January 2026 data shows Polish corporate wage growth is still very strong at 11.9% year-on-year, which makes the inflation outlook harder. This persistence means the debate about the final rate level is far from settled.
Trading Implications For Eur Pln
The tight EUR/PLN range of 4.210–4.230 seen in early 2025 has since widened. The pair is now closer to 4.280. This reflects that the NBP has been more cautious than the market first expected. It also suggests the zloty’s strength has a limit as long as rate gaps versus the Eurozone are expected to narrow more slowly.
For derivative traders, this uncertainty can support positioning for a rise in EUR/PLN volatility. If the market is still underestimating the NBP’s caution, buying options such as straddles or strangles could make sense. This gives exposure to a large move in either direction ahead of the NBP’s March meeting.
In rates markets, forward rate agreements (FRAs) that price in cuts later this year may now be too optimistic. Given strong wage growth, there is a rising risk the NBP holds rates steady for longer. Traders may consider positions that benefit if Polish rate expectations reprice higher in the coming weeks.
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