Feb 8, 2023
Poland Holds Rates as Easing Inflation Plays Into Hands of Doves
(Bloomberg) -- Poland’s central bank left interest rates on hold for a fifth month as signs of a global disinflation strengthened the case for a dovish majority of policy makers.
The Monetary Policy Council held its benchmark rate at 6.75%, matching the expectations of all 32 economists surveyed by Bloomberg.
Governor Adam Glapinski has argued in the last few months against additional rate increases, warning that a deeper economic slowdown could trigger job cuts, which the monetary authority wants to avoid.
As inflation has eased globally, Polish consumer prices decelerated in December to 16.6% from a year earlier. They are, however, expected to gain pace in the first quarter due to an increase in regulated prices.
But as inflation is expected to slow thereafter, it could potentially pave the way for a rate cut later this year, Premier Mateusz Morawiecki said last week.
In early October of 2021, the central bank unexpectedly changed course and raised rates just hours after the prime minister said he was hoping for an “appropriate” reaction to accelerating inflation.
Money markets are currently pricing in almost a full percentage point of rate cuts over the next 12 months.
--With assistance from Barbara Sladkowska.
©2023 Bloomberg L.P.