EM FX: Policy holds shape CLP, PLN, PEN, TRY – BBH

Brown Brothers Harriman’s (BBH) Elias Haddad expects Chile, Poland, Peru and Türkiye to keep policy rates unchanged at upcoming meetings. Haddad highlights that Chilean Peso (CLP) should trade stronger given copper, Polish Zloty (PLN) benefits from positive real rates and external balances, Peruvian Sol (PEN) may underperform if real rates stay negative, and tight policy in Türkiye is justified as disinflation stalls around 30% year-on-year.

Central bank holds and EM currency risks

"Chile’s central bank is widely expected to keep the policy rate on hold at 4.50% for a fifth straight meeting (Tuesday). The bank is in a good place to keep rates steady for some time. Two-year inflation expectation surveys remain close to its 3% inflation target and the policy rate is near the top of the bank’s 3.75%-4.75% neutral range estimate."

"USD/CLP should be trading much lower given the rally in copper prices, Chile’s main commodity export."

"National Bank of Poland (NBP) is widely expected to keep the policy rate at 3.75% for a fifth straight meeting (Wednesday). NBP delivered 200bps of cuts since July 2025 and the swaps curve implies 75bps of tightening to 4.50% in the next twelve months as inflation is gaining traction."

"Still, Poland’s positive real rates and favorable balance of payments backdrop continue to support PLN."

"Peru’s central bank (BCRP) is widely expected to keep rates unchanged at 4.25% for a 12th consecutive meeting (Thursday). PEN risks underperforming if the bank remains relaxed about above target inflation as it could keep real rates negative for longer."

"Türkiye central bank (CBRT) is widely expected to keep rates on hold at 37.00% for a fifth straight meeting (Thursday). The disinflationary process has stalled around 30% y/y and argues for continued tight monetary policy."