Poland’s presidential election first round unlikely to directly impact zloty, but uncertainty rises (opinion)
The first round of Poland’s presidential election is not expected to affect the zloty directly, but increased uncertainty around the second round may prompt markets to price in higher risk for the currency, economists estimate.
"The main factor influencing the currency is monetary policy and the stance of the Monetary Policy Council. We have seen clear signals from Poland's central bank NBP governor and Council members that a pause in rate cuts is likely in June," Daniel Piekarek, macroeconomic analyst at Bank BPS, told PAP Biznes.
He added that this outlook helps limit the potential consequences of any electoral surprises or negative global news.
Piekarek assessed that even if more votes shifted toward the opposition candidate, the market impact should be limited.
He explained that if the opposition were to win, "we would see a continuation of the current situation," though cooperation between the president and government would be difficult. He noted there would be no direct market impact even in the event of an electoral surprise, unless a government crisis emerged.
"The exit poll result points to less room for a clear outcome in the second round. Until now, markets had assumed Trzaskowski’s victory as the baseline scenario, which stabilized the zloty. With greater uncertainty, the market may now price in a higher risk premium for the PLN," Wojciech Stepien, economist at BNP Paribas, said.
He said a weaker zloty is more likely in the coming days, with the potential for a rebound depending on developments before the run-off.
Jakub Borowski, chief economist at Credit Agricole, said the first-round result was in line with expectations and that key market drivers will be the polls released in the final week before the second round.
"At this stage, it is difficult to expect the result to be seen as surprising by markets. Average polls indicated a close race and this order of candidates," he noted.
Borowski added that if upcoming polls show Trzaskowski losing his frontrunner status, "then we may see a market reaction."
He said the role of polls as a market factor will increase in the last week before the June 1 run-off.
Rafal Trzaskowski, the centrist candidate of the main ruling Civic Coalition party, will face off against Karol Nawrocki, backed by opposition Law & Justice party, in a run-off vote after the two topped first round of the Polish presidential election, a late exit poll by the Ipsos agency for TV broadcasters confirmed.
Trzaskowski won 31.2 percent of the Polish presidential vote on Sunday, beating Nawrocki, who secured 29.7 percent, a poll that incorporates actual results from 90 percent of polling stations showed.
Turnout in the first round came to 66.8 percent, Ipsos said.
Far-right candidates Slawomir Mentzen and Grzegorz Braun took 14.5 percent and 6.3 percent, respectively.
A run-off between the two top contenders will be held in two weeks, on June 1.
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