Comments from Poland’s central bank Governor Glapinski this week underlined the hawkish shift from the NBP and support our view that interest rates will rise to at least 4.5% in this cycle. Meanwhile, tensions between Russia and the West over Ukraine showed further signs of easing this week which has reduced some of the risk premium in financial markets, with the ruble strengthening from 80/$ a few weeks ago to 75/$ now. Elsewhere, Czechia’s government put forward its “anti-inflationary” 2022 budget proposal which should help to temper demand and prevent imbalances from building.
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