Poland’s inflation dropped to the National Bank of Poland’s 2.5% target, prompting markets to price in potential rate cuts.
The Polish zloty weakened against the euro after inflation in Poland fell to the National Bank of Poland’s 2.5% target. Broad price declines and stable core inflation contributed to the drop, reducing expectations for further rate hikes.
Markets have shifted focus toward potential rate cuts, which could pressure local market rates. Prior inflation prints had remained above target, keeping monetary policy expectations elevated. The latest data contrasts with earlier trends, signaling a potential shift in the central bank’s stance.
The zloty’s decline reflects investor adjustments to the new inflation outlook and anticipated policy easing.