Monetary policy across Europe is navigating a complex landscape, with central banks in Poland and Sweden facing divergent pressures from external factors, according to recent analyses from major financial institutions. The Narodowy Bank Polski (NBP) has implemented a series of interest rate cuts, yet the Polish zloty has shown unexpected resilience. Conversely, the Riksbank in Sweden may be forced to delay its planned rate cuts due to persistent inflation threats from volatile oil prices.
In Poland, the central bank began an easing cycle in late 2023, reducing its reference rate from 6.75% to 5.75% over six months. Despite conventional wisdom suggesting such dovish moves would weaken the currency, the zloty has maintained stability against the euro and US dollar. Analysis from ING Bank Śląski attributes this resilience to Poland's strong economic fundamentals, including robust GDP growth, a current account surplus, and substantial foreign investment inflows. The bank's research notes the currency has "increasingly decoupled from pure interest rate differential models," highlighting Poland's economic maturation.
In Sweden, the outlook is different. Analysts at Nomura Holdings warn that the Riksbank's anticipated monetary easing faces significant headwinds from global oil prices, which have consistently traded above $85 per barrel in early 2025. Nomura's analysis indicates that each $10-per-barrel increase in oil prices typically adds 0.3-0.4 percentage points to Swedish inflation within six months. With oil prices approximately 18% above the Riksbank's previous assumptions, the path to its 2% inflation target is less certain.
Consequently, Nomura's baseline scenario now suggests the Riksbank will implement only two 25-basis-point rate cuts in 2025, likely starting in September instead of June, rather than the three or four cuts previously anticipated by markets. This delay is further complicated by Sweden's weak krona, which amplifies imported inflation, and wage settlements that still exceed productivity growth.
