The National Bank of Poland (NBP) met the broad consensus among market participants and held interest rates steady and adopted a cautious tone earlier on Tuesday, saying that future data would guide policy choices but also that inflation concerns are very much alive.

The central bank kept rates at 3.75%, but policymakers said the next measures would depend on how the economic outlook unfolds, leaving the bank firmly in wait-and-see mode for now.

In addition, the NBP cited a number of variables that might complicate the inflation picture, including fiscal policy, robust wage growth and laws impacting fuel costs, all of which could put consumer prices under upward pressure.

Furthermore, rate setters also said that the larger global environment remains a danger to the Polish economy, with increased geopolitical uncertainty being a significant factor for holding rates.

One interesting inclusion was the NBP’s reminder that it remains prepared to intervene in the FX market if necessary, a signal that policymakers are keeping a close watch on Zloty (PLN) volatility.

FX impact: The Polish currency gathers some pace following the bank’s decision, enough to prompt EUR/PLN to leave the area of daily highs near 4.2370 and slip back to the 4.2340 zone, just below its key 200-day SMA.

Bottom line: The NBP is in no rush to signal its next move. While rates remain unchanged, policymakers continue to see inflation risks on the horizon and appear determined to retain maximum flexibility as they assess incoming data and an increasingly uncertain geopolitical environment.