Lira and CEE FX: Turkish Lira, Zloty, Forint — 2026-09-12

Top developments

CBRT Holds Policy Rate at 37% Amid Disinflation Progress

On September 10, 2026, the CBRT’s Monetary Policy Committee (MPC) decided to keep the one-week repo auction rate unchanged at 37%, marking the sixth consecutive hold and extending the pause in easing to over eight months. The decision aligned with market expectations as the bank balances disinflationary progress against the need for continued tight monetary conditions. Analysts from ING noted that normalizing liquidity and a lower effective funding rate have pushed market pricing closer to their view for 2026, supporting a gradual repricing of the TRY rather than abrupt moves. This stability allows the CBRT to focus on managing inflation expectations, which have risen to 29.61% for year-end according to recent surveys.

Forint Surges on Reports of MNB Pausing Rate Cuts

The Hungarian forint experienced a sharp appreciation of approximately 1.6% against the euro on September 4, after Bloomberg reported that the MNB might stop its rate-cutting cycle in September and potentially lower its inflation target from 3% to 2.5%. This leak, described by local media as a "critical moment" for the currency, caused the EUR/HUF rate to drop rapidly from the 366–367 range to around 362. The move reflects growing confidence that the MNB is nearing the end of its easing phase, which began with a cut to 5.50% in August. However, volatility remains high, with the forint weakening again toward 365 later in the week as traders reassess the likelihood of further cuts.

Polish Zloty Volatility Driven by ECB Hikes and USD Strength

The Polish zloty faced pressure against both the euro and the dollar this week, influenced by the ECB’s decision to raise interest rates by 25 basis points and broader dollar strength. On September 11, the NBP reference rates showed the zloty weakening, with EUR/PLN rising toward 4.3250 and USD/PLN near 3.7250. Local analysts noted that while the ECB hike was priced in, the true driver of volatility was the diverging path of global central banks, with the Fed facing pressure to cut rates amid political headwinds. The zloty’s performance remains closely tied to risk sentiment in the broader CEE region, where fiscal risks are being monitored more closely than in Western Europe.

Local view

In Türkiye, local media such as Cumhuriyet and Hürriyet focused heavily on the rationale behind the CBRT’s decision to keep rates at 37%, emphasizing that the bank has not cut rates for over eight months despite easing inflation. Market reaction was muted, with limited movement in Borsa Istanbul and the dollar/TRY pair, suggesting the hold was fully anticipated. In Hungary, Világgazdaság and Index.hu highlighted the impact of the Bloomberg leak, noting that the MNB’s potential shift toward a tighter stance was the primary driver of the forint’s strength, overshadowing domestic political narratives. Polish financial outlet FXMag pointed out that while the ECB hike was expected, the zloty’s weakness against the dollar reflected broader emerging market pressures rather than specific domestic concerns.

Context & numbers

• CBRT Policy Rate: Held at 37.0% on September 10, 2026.
• TCMB Survey Expectations: Year-end inflation expectation rose to 29.61%; 12-month USD/TRY forecast is 58.60, while year-end USD/TRY is seen at 51.57.
• NBP Reference Rates (Sept 11): USD/PLN at 3.7267, EUR/PLN at 4.3228, CHF/PLN at 4.5768, GBP/PLN at 5.0332.
• Forint Range: EUR/HUF fluctuated between 362 and 367 during the week following the MNB policy leak.
• USD/TRY: The lira hit a historic high against the dollar on September 7, reflecting ongoing managed depreciation dynamics.

On the radar

• MNB Policy Decision: Traders are watching for official confirmation of the MNB’s next steps regarding rate cuts and the inflation target, following the significant market reaction to leaks earlier in the week.
• Fed Meeting: The upcoming Federal Reserve meeting is cited as a key test for global currencies, including the zloty and lira, depending on whether the Fed signals cuts amidst political pressure.
• Turkish Liquidity Tools: Commerzbank analysts emphasize that effective monetary conditions in Türkiye depend more on liquidity tools than the headline repo rate, suggesting close monitoring of CBRT’s weekly funding operations.