Chile: Policy pause reflects fragile growth – Societe Generale
Societe Generale’s Dev Ashish reports that the Central Bank of Chile kept the monetary policy rate at 4.50% in September, as weak domestic growth offsets rising external inflation risks. The bank highlights disappointing activity, deteriorating labour markets and anchored inflation expectations.
Societe Generale analysts Kenneth Broux and his team anticipate the National Bank of Poland (NBP) to maintain interest rates at 3.75% without any changes. Governor Glapiński highlighted the importance of flexibility and data dependency. As inflation intensifies and a near-term rate cut is no longer on the table, they expect the European Union (EU) to favor the Zloty, with EUR/PLN staying within the 4.30 range in upcoming quarters.
In Central and Eastern Europe, the NBP is expected to keep the policy rate unchanged at 3.75%, despite Governor Glapiński's dovish statements. Since July, inflation has worsened, hitting 3.4% year-over-year, primarily due to rising fuel prices resulting from the Middle East tensions. This development has eliminated the prospect of a September rate cut.
Glapiński reiterated that the central bank should remain flexible and data-dependent. MPC member Duda indicated that the central bank may maintain the same rate until the second quarter of 2027. Based on these factors, the outlook for the currency remains supportive, which should help the PLN remain biased towards the 4.30 level.
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