Commerzbank expects Poland’s National Bank of Poland (NBP) to keep interest rates unchanged after an energy price shock linked to the conflict in Iran disrupted the rate-cutting cycle that ran until last month. It says the wider analyst consensus also forecasts steady rates over the medium term.
The report says oil prices are unlikely to return to previous levels quickly, which limits scope for easing. It adds that rate cuts are not expected unless oil falls below $70 per barrel, which it does not currently forecast.
Policy Outlook Under Energy Shock
It states that government emergency economic measures, such as fuel price caps, are likely to remain in place for now. It also says these measures can distort price signals that normally guide monetary policy.
Commerzbank says monetary policy is now responding to a geopolitical shock that is partly shaped by fiscal mitigation, rather than normal economic cycles. As a result, it expects the NBP to stay on hold under current conditions.
The energy price shock stemming from the recent conflict in Iran has completely altered the landscape for Poland’s monetary policy. We have seen the National Bank of Poland’s easing cycle, which was active until just last month, come to an abrupt halt. This is supported by the latest GUS data for March 2026, which showed headline inflation re-accelerating to 5.1%, driven by soaring fuel costs.
As a result, we are watching a significant repricing in Polish interest rate derivatives. Forward Rate Agreements that were pricing in at least 50 basis points of cuts in early 2026 have now reversed, showing no easing expected for the rest of the year. The market now firmly expects the NBP to hold its policy rate steady at 5.25% for the foreseeable future.
Market Positioning And Watch Levels
Monetary policy is now directly linked to the price of Brent crude, which is currently trading around $98 per barrel. This reactive stance reminds us of the situation back in 2022, when central banks globally were forced to respond to external energy shocks. In this environment, traders should not anticipate any dovish pivots from the central bank.
This suggests that positioning for Polish interest rates to stay elevated is the most logical approach. Strategies could include receiving fixed on Polish interest rate swaps or selling out-of-the-money payer swaptions to bet against rate hikes. While the Zloty is volatile, the hawkish NBP is providing a floor for the EUR/PLN exchange rate, keeping it anchored near the 4.35 level.
The key signal to watch for a change in this outlook would be a sharp drop in oil prices. We will not see rate cuts back on the table unless Brent crude were to fall decisively below the $70 per barrel threshold. Until such a geopolitical de-escalation occurs, policy will remain on hold.
