PLN: Zloty Inches Higher, Shrugs Off NBP Developments

EUR/PLN deals at 4.2258, marginally below neutral levels, showing little sensitivity to the latest developments surrounding the central bank amid the perception that they will not have any immediate impact on monetary policy. A sell-off past 4.22 would open up the 4.20 handle, while bulls look for a rebound towards Oct 10 high of 4.2693.

• MPC's Litwiniuk left the door open to another small downside 'correction' in interest rates if the economy evolves in line with projections, but he called for continued caution. The lone hawkish dissenter Tyrowicz said that 'it can't be said that we are already on the safe side' in the fight against inflation as volatile energy disinflation outweighs heightened services inflation, which translates into elevated exposure to unanticipated external shocks.
• The NBP remains engulfed in a management crisis, which sees Governor Glapiński pitted against a coalition of Management Board members trying to reduce his discretionary powers. Rebel Board member Piotr Pogonowski said in a statement that the initiative to change internal regulations was not a 'mutiny' but an attempt to fulfil the Board's statutory duties.
• The government approved a virtual carbon copy of legislation regulating crypto asset markets after the initial one was vetoed by President Karol Nawrocki. The President's aide Marcin Przydacz signalled that the head of state would veto the bill again, if it returned to his desk in more or less unchanged form.
• POLGB yields have crept higher across the curve, last sit 1.4-4.2 above neutral levels. Local stock benchmarks consolidate yesterday's upswings, hovering just above neutral levels at typing.