(Bloomberg) -- Poland’s central bank left borrowing costs unchanged yet again, defying growing pressure to restart monetary easing.
The Monetary Policy Council kept its benchmark at 5.75% — the level where it’s been since last October — in line with the forecasts of all 31 economists surveyed by Bloomberg. The decision comes amid calls by government officials to reduce interest rates to help boost economic growth and as other eastern European central banks ease policy.
Most members of the rate-setting panel expect a discussion over lowering rates to start at the beginning of next year, policymaker Ludwik Kotecki said last month. The 10-member Monetary Policy Council last cut rates in October 2023, just before Poland held elections, and the rhetoric of Governor Adam Glapinski has since turned from dovish to hawkish.
Still, Polish inflation has accelerated beyond the policymakers’ target band in the last two months, led by energy prices after the government reduced costly subsidies.
In the cabinet’s most recent verbal intervention, Deputy Premier and Defense Minister Wladyslaw Kosiniak-Kamysz said on Wednesday that rates “should definitely be lowered in the nearest future.” Poland’s economy expanded 3.2% in the second quarter, from a year earlier, and the government is targeting nearly 4% growth next year.
The central bank will publish a statement at 4 p.m. in Warsaw, while Glapinski is due to hold a monthly news conference at 3 p.m. on Thursday.
“We expect the governor’s tone after the September meeting to be somewhere between his hawkish tone from July and the dovish MPC majority, which we heard over the summer,” ING Bank Slaski economists led by Rafal Benecki said in a note published before the rates announcement. “Glapinski presumably does not want to be outvoted by the rest of the MPC.”
Glapinski’s comments will also come after his visit to the Federal Reserve’s symposium in Jackson Hole — where policymakers including Fed Chairman Jerome Powell signaled a shift to easing.
--With assistance from Barbara Sladkowska and Maciej Martewicz.
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