We must make Poles spend less and save more. They not only hold back credit, but generate savings. And this is only possible with the issuance of bonds with an interest rate above inflation. It is about the bonds of the National Bank of Poland, not the government bonds – said economist Bogusław Grabowski, a former member of the Monetary Policy Council, in “Rozmowa Piaseckiego” on TVN24.
From the introductory ones data of the Central Statistical Office shows that inflation in June this year. was 15.6 percent year on year. Final data on last month’s price increases will be released on Friday, July 15th.
– The worst is ahead, hard times, a much worse situation than before, for everyone: and for savers, because they will lose money even faster, especially when they convert into foreign currencies, and for borrowers, because they will have even higher interest rates and persistently high inflation – he said.
He added that the current government, the president of the NBP, president Kaczyński are aware that fighting inflation would introduce high costs. – All borrowers would pay for the fight against inflation that they could not bear. (..) That is why they chose the strategy we do not fight inflation until the elections. They realize they are going to be absolutely trapped in it the zloty exchange rate he said.
Ways to fight inflation
Grabowski was asked if the interest rate should be at a level of several percent in order to fight inflation. “But of course, at least two digits,” he replied. – There is no possibility of lowering inflation to 2.5%, especially with such fiscal distribution, without raising rates above 10%. And the borrowers cannot withstand this – he assessed.
According to the economist, “the whole team is responsible for it”. – Not only the President of the National Bank of Poland, but also the Minister of Finance, the head of the Bank Guarantee Fund, and most of all the Head of the Financial Supervision Authority, because they all allowed for this rapid growth, such a large share of floating interest rate loans. All this makes the central bank virtually toothless, because it cannot raise interest rates to the necessary level – he said.
– I put forward my own idea: we need to generate the fight against inflation through the second channel, which is savings. We must make Poles spend less and save more. They not only hold back credit, but generate savings. And this is only possible with the issue of bonds with an interest rate above inflation, but of the National Bank of Poland and not of the government ones, he said. – That would make interest rates separate from savings and interest rates from credit – he explained.
When asked if it would be a good idea to freeze interest rates on mortgage loans, he replied: “If we would freeze the costs of the existing loan without freezing WIBOR, it would be some way.” – But then we have a catastrophe in the banking sector because if we have rapidly rising savings rates, frozen interest rates on loans, we have a threat to the banking sector – explained Grabowski.
There is no miraculous way to deal with such a broken economy and instruments to counteract the crisis, he stressed.
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