Executive summary
Poland's government decided on large and very swift support to protect firms’ liquidity and workers’ incomes amid the pandemic. The National Bank of Poland acted as an enabler with aggressive interest rate cuts to almost zero and a large-scale quantitative easing programme. This week the MPC should point to a slightly better outlook, though uncertainty is set to remain high.
QE is well advanced, but the NBP may signal it remains vigilant rather than discuss exit strategies as proposed by the hawks recently. As costs of the crisis have been shifted off the central budget, it is in better shape than feared with only modest issuance of POLGBs expected in 2H20.
The outcome of the elections, where incumbent Andrzej Duda was narrowly re-elected, should have a marginal impact on POLGB’s and the zloty, as the result suggests a continuation of previous policies and foreign investors are underweight Polish assets.
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