Expectations for a rate cut by the National Bank of Poland have evaporated, with markets now pricing in a potential interest rate hike at the central bank's next policy meeting.
This marks a sharp reversal from the dovish stance previously signaled by Governor Adam Glapinski, who had indicated that a reduction in borrowing costs was likely.
The shift in sentiment comes as the US dollar strengthens broadly, reaching its highest level against the euro since March.
The greenback has also gained ground against the Polish zloty, adding pressure to the local currency and complicating the monetary policy outlook for Warsaw.
According to reports from Nyhetsbyrån Direkt, the probability of a rate increase has overtaken the likelihood of a cut, reflecting a sudden change in market positioning.
This development suggests that inflationary pressures or currency weakness may be forcing the central bank to reconsider its earlier easing trajectory.