Quotes from Commerzbank Corporates & Markets:
-PLN: EUR-PLN fell modestly yesterday as MPC hawks, in particular Mr. Glapinski, argued that there is no room left to cut rates further; independently, at a speech, Governor Belka described the zloty as undervalued, which confused markets.
-But, these remarks are not unusual: 1) Hawks will keep complaining as easing is considered, but the rate will still be cut if even one swing voter supports this in March; 2) Belka called the zloty undervalued from a long-term industrial competitiveness point of view.
-As far as March is concerned, we still expect 25bps rate reduction based on worse-than-expected deflation in the last reading.
