EUR/PLN: NBP to protect the 4.50 level – Rabobank

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The latest remarks from the National Bank of Poland (NBP) provide EUR/PLN with further support. Economists at Rabobank notes the preference to keep the pair above the 4.40-4.50 zone.

See – EUR/PLN: NBP to prevent a move below 4.50 – TDS

Key quotes

“The NBP shut the door for EUR/PLN to fall in the short-term by explicitly saying that it may intervene in the FX market in order to strengthen the impact of its monetary policy easing on the economy. Essentially, the NBP does not want a stronger zloty.” 

“Until uncertainties related to the path of the pandemic substantially diminish, the preference to keep EUR/PLN above the 4.40-4.50 area is likely to prevail at the NBP. This means that the scope for EUR/PLN to fall should remain limited in the first half of 2021 or longer depending how quickly Poland will be able to vaccinate a sufficient percentage of citizens to fully reopen the economy.”

“While the NBP favours a weaker currency, prolonged FX interventions to curb zloty’s gains may have negative consequences. Poland could be labelled a currency manipulator and its strategy could lead to a full-scale currency war in the CEE region.” 

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