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Poland May Start Rate Cut Talks From March, MPC’s Kochalski Says

(Bloomberg) -- The Polish central bank’s latest inflation and growth forecasts effectively rule out discussions on lowering interest rates at least until next March, policymaker Cezary Kochalski said. 

His comments come after central bank Governor Adam Glapinski said last week that monetary easing was off the table until 2026 due to mounting price pressures. Some of Kochalski’s colleagues from the 10-member Monetary Policy Council, however, have signaled that cuts were still possible next year.

READ: Poland’s Central Bank Chief Throws Easing Expectations Into 2026

In its latest projections, the central bank hiked average annual inflation forecasts for this and next year, and reduced economic growth guidance compared to its view from March. Inflation is expected to reach a peak at 6.3% in the first quarter of 2025 and then gradually slow to the central bank’s target at the end of 2026. 

“The July projection doesn’t provide room for rate cut discussions in the perspective of the coming quarters,” Kochalski told Bloomberg. “In my opinion, rate cuts should be ruled out this year, while a discussion on the subject could start when next March’s inflation forecast is released.”

Kochalski said he favors a cautious approach to changing official borrowing costs, saying that the current “high level of rates” was a buffer against the economy overheating. Last week, the MPC left its benchmark at 5.75% for the ninth straight month, citing continued inflation risks. 

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