Poland’s central bank, the National Bank of Poland (NBP), kept its policy rate unchanged at 3.75%. Markets are pricing no further rate changes through 2026.
NBP governor Adam Glapiński is due to hold a press conference. Market focus is on whether his tone turns very hawkish.
Markets Focus On Glapinski Tone
EUR/PLN has eased and is moving towards 4.22 after reversing a spike linked to the Middle East conflict. Polish government bonds remain above pre-conflict levels, with the 10-year POLGB still about 65bp higher than the pre-conflict yield of 4.92%.
The article was produced using an artificial intelligence tool and reviewed by an editor.
The National Bank of Poland is holding its policy rate steady at 3.75%, and we see no reason for this to change for the rest of 2026. With inflation moderating to 3.1% in April 2026, just above the central bank’s target range, this pause seems justified. For us, this predictability in Polish rates removes a major source of market volatility in the coming weeks.
This stable rate environment is supporting the zloty, with EUR/PLN now quietly moving towards the 4.22 level. The pair has fully retraced the spike from the recent Middle East tensions, showing underlying resilience in the currency. This trend suggests that selling volatility in EUR/PLN could be a viable strategy, as the carry trade remains attractive with a calm central bank.
Polish Bond Market Risk Premium
In contrast, we are still seeing stress in the Polish bond market, which presents a different picture. The 10-year government bond yield is stuck around 5.57%, a full 65 basis points above its pre-conflict level of 4.92%. This tells us that while currency markets have moved on, bond traders are still pricing in a significant risk premium.
Looking back from where we were in 2025, after the market jitters from the war in Ukraine, the zloty has proven its ability to bounce back from geopolitical shocks. We believe the bond market is lagging and that this yield gap will eventually narrow as stability prevails. Therefore, positioning for a fall in Polish bond yields, perhaps through interest rate swaps or bond futures, seems like a compelling relative value trade against the already recovered currency.
