Poland’s National Bank (NBP) is due to announce its monthly rate decision today. Market consensus expects a 25 basis point cut, with inflation running slower than anticipated and possibly set to stay low in the new NBP forecast. There are differing views within the Monetary Policy Council on how far rates should fall. References include a 3.50% terminal rate, a 3.25% level, or only one further 25 basis point cut after this move.

Expected Terminal Rate Path

The policy path is described as leaning towards a 3.25% terminal rate. The zloty is expected to lag peer currencies until after Poland’s next general election, which is possibly in November 2027. If there is no surprise in today’s decision, attention is expected to shift to the press conference tomorrow afternoon. That event is set to provide more detail on future rate intentions than the rate announcement itself. Looking back to 2025, we saw a clear pattern where a dovish National Bank of Poland weighed on the Zloty. The central bank’s path toward lower rates created a predictable headwind for the currency. This historical tendency for policy easing to drive Zloty underperformance is a key lesson for the current market. As of today, March 4th, 2026, Poland’s inflation is running at 3.1%, which is still above the central bank’s 2.5% target. Despite this, with the policy rate holding at 4.50%, the NBP seems hesitant to adopt a more aggressive hawkish stance, echoing the dovish bias we saw last year. This creates an environment where the Zloty may struggle to gain significant ground against the Euro or Dollar.

Trading And Hedging Ideas

For traders anticipating renewed Zloty weakness, buying EUR/PLN call options for the coming weeks is a direct strategy. This provides the right to buy the pair at a predetermined price, offering upside potential if the Zloty weakens as expected following NBP commentary. The defined risk of the option premium makes this an attractive way to position for a move higher in EUR/PLN. Given the potential for surprising statements from the NBP press conference, volatility itself is a tradable asset. A long straddle on the USD/PLN, involving the purchase of both a call and a put option with the same strike and expiry, could be effective. This position profits from a significant price move in either direction, capitalizing on any uncertainty surrounding the future path of interest rates. Selling the Zloty in the three-month forward market is another viable approach. This allows traders to lock in an exchange rate today for a future date, profiting if the spot rate weakens more than the forward points predict. This is a common strategy to express a bearish view on a currency when its central bank is perceived to be behind the curve on inflation. Create your live VT Markets account and start trading now.

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