While trading with the Czech koruna was mixed on Wednesday, the Polish zloty and the Hungarian forint eased, mainly on concerns about monetary easing. In Poland, policymaker Andrzej Bratkowski had said that the NBP should cut interest rates by 50 basis points as soon as in May if wages and the output data are weak. The weak wage growth was confirmed yesterday, when corporate sector wages rose by a mere 1.6 % y/y in real terms, much less in comparison with the consensus of 2.75 %. Industrial production will be released later today. In our opinion, the industry should be bottoming out, sending thereby a positive signal for the Polish currency. Moreover, a wide range of viewpoints exists within the NBP board regarding optimum shape of monetary policy. Jan Winiecki, another NBP board member, said yesterday that Poland did not need to cut interest rates further. According to his view, low inflation is caused by statistical base effect and positive impact of further rate cuts on real economy is questionable.
Click here to read the full report: Market Research
KBC