The Polish Central Bank was the latest to join the hawkish shift, starting to play catch up to Hungary and Czech Republic, isolating Turkey. The first hike since 2012 came as a surprise, with all of the analysts on the Bloomberg poll calling for no change. One of the most interesting twists of this story was the comment by Prime Minister Morawiecki calling for an “appropriate” response to the inflation threat. It’s not every day that we see the government pressuring the central bank to raise rates. In the regional context, the move further isolates Turkey, with next policy meeting is October 21 and another cut then seems likely. Turkey remains the most problematic amongst major EMs, and with no end to political interference in sight, it’s hard to construct any positive narrative for local assets.
The Polish Central Bank was the latest to join the hawkish shift, starting to play catch up to Hungary and Czech Republic, isolating Turkey. The first hike since 2012 came as a surprise, with all of the analysts on the Bloomberg poll calling for no change. One of the most interesting twists of this story was the comment by Prime Minister Morawiecki calling for an “appropriate” response to the inflation threat. It’s not every day that we see the government pressuring the central bank to raise rates. In the regional context, the move further isolates Turkey, with next policy meeting is October 21 and another cut then seems likely. Turkey remains the most problematic amongst major EMs, and with no end to political interference in sight, it’s hard to construct any positive narrative for local assets.
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