By Karol Badohal
WARSAW (Reuters) – The National Bank of Poland (NBP) is expected to keep its main interest rate steady at 5.75% on Wednesday, a Reuters poll showed, as inflation stands near double the central bank target.
NBP Governor Adam Glapinski reiterated last week that Poland’s elevated inflation currently left no grounds for policy easing. He cited risks stemming from wage growth, accelerating economic expansion and loose fiscal policy, among others.
Poland’s annual inflation accelerated in February to 4.9%, less than expected due to changes in the baskets used to calculate price growth, according to economists, who see it increasing further in March. The National Bank of Poland’s inflation target is 2.5% plus or minus one percentage point.
All 30 analysts in the Reuters poll forecast that interest rates would remain steady in April. The NBP has kept interest rates unchanged since a surprise reduction in autumn 2023.
Glapinski’s caution about resuming monetary easing is not shared by some rate-setters who see the possibility of interest rate cuts after the publication of the central bank’s next inflation projection in July.
“I expect no change in the NBP’s rate at the upcoming meeting… I expect interest rate cuts to resume in July, but uncertainties remain high, both in terms of timing and size of rate cuts,” Generali Investments CEE Chief Economist Radomir Jac said.
Speaking of the April monetary policy council meeting, Morgan Stanley analyst Georgi Deyanov said: “We see a reasonable chance for one or two MPC members to seek a motion for a rate cut. Still, we continue to expect a first 25bp (basis point) rate cut at the July core meeting.”
A motion to lower interest rates was last put forward in October 2023, when the MPC cut borrowing costs by 25 basis points.
(Reporting by Karol Badohal; Editing by Gareth Jones)
