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Monday, June 17, 2024

Big cut in interest rates. The opposition is talking about the Turkish variant

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The Monetary Policy Council decided on Wednesday to reduce interest rates by 75 basis points. In turn, on Thursday, at a press conference, NBP President Adam Glapiński announced the end of double-digit inflation. Why now? – Because there are elections in a few weeks – says the opposition.

The opposition has no doubts – what the Monetary Policy Council did on Wednesday has nothing to do with economics. There were no reasons to cut rates, and certainly not that much. – We have no doubt today that Glapiński is fully involved in politics and elections – says Donald Tusk. To confirm this thesis, the head of the Civic Coalition shows that in March 2022, when inflation was 11 percent, the MPC raised interest rates by 75 basis points. Now, when inflation was officially above 10 percent, the Monetary Policy Council cut rates by 75 basis points. – Jarosław Kaczyński took the remote control, pressed the button “Adam Glapiński lower interest rates, because there is an election campaign” and Adam Glapiński did it – believes Tomasz Trela ​​from Nowa Lewica.

Government spokesman Piotr Mueller argues that there is no politics involved in this rate cut. – Since February, step by step, inflation in Poland has been consistently falling and this is good news, of course, and I guess that it was on the basis of this decision, based on these macroeconomic and inflation data (…) that the Monetary Policy Council decided to make such a move – says the government spokesman.

The Monetary Policy Council’s decision to lower interest rates surprised economistsStefania Kulik/Fakty po Południu TVN24

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Turkish variant?

It was very similar to what we hear from opposition politicians in Turkey. They are convinced that both there and in Poland – despite the assurances of the President of the National Bank of Poland that the central bank is free from politics – decisions on interest rates were not really made by central banks. – Kaczyński follows in the footsteps of Orban and Erdogan. We were promised Budapest in Warsaw, and unfortunately we have Hungarian elements, including high inflation, so maybe Ankara will be here now, says Izabela Leszczyna from PO.

In 2022, Turks had over 80 percent inflation. When it officially dropped to 44 percent before the elections, the central bank started cutting rates. Today – despite the drastic post-election rate hikes – inflation reaches 60 percent, and the dollar is again more willingly accepted at the bazaars than the lira. – I don’t want to say that in Poland we will soon pay in dollars or euros, but this type of NBP policy goes in this direction. I do not want to say that it will be tomorrow, but the zloty has already ceased to be credible today – assesses Ryszard Petru from the Third Road.

– This move (lowering interest rates – editor’s note) is such a very crazy move, such a jump on thin ice. And when you jump on thin ice, you wet four letters – warns former Prime Minister Waldemar Pawlak.

The problem is that the possible effects of this “jumping” will be felt by all of us.

Main photo source: Shutterstock

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