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Interest rates 2023. What will be the decisions of the Monetary Policy Council? Ireneusz Dąbrowski, MPC member, comments

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Interest rates may be lowered in 2023. This is the result of Thursday’s statement in RMF FM by Professor Ireneusz Dąbrowski, a member of the Monetary Policy Council. – At the turn of the year there may be room for interest rate cuts, there is a high probability of this – he said. According to the economist, there is a high probability that inflation will fall to a single-digit level at the end of the year.

According to preliminary data from the Central Statistical Office inflation in December amounted to 16.6 percent year on year. For comparison, the increase in the prices of goods and services in November last year amounted to 17.5 percent. Every year. Ireneusz Dąbrowski, member of the Monetary Policy Council, admitted that in January 2023 we can see acceleration inflation.

“It is possible, but I think it will be a small increase,” he said. – Even at the beginning of the year, some increase in prices is possible, but it will be lower than we expect – he added.

The MPC member does not think that inflation will reach 20 percent. “I don’t think we’ll get to 20,” Dąbrowski said. In his opinion, we will see the peak of inflation “at the turn of February and March”. Dąbrowski said that “there is a high probability” that inflation will fall to a single-digit level at the end of the year.

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PAP/Maciej Zielinski

He pointed out that “if we look at the economy as a whole, the problem at the moment is the increased core inflation, i.e. the so-called second-round effect.” – He is the problem of how to bring core inflation down to lower levels – admitted MPC member to RMF FM.

Interest rates in 2023

According to Dąbrowski, “at the turn of the year there may be space for interest rate cutsthere is a high probability of this”. He also pointed to market forecasts. FRA contracts indicate that NBP rates will fall by the end of this year. – I can say that the markets are not necessarily wrong – he said. When asked if this means that the MPC will no longer raises interest rates, Dąbrowski announced that “this cannot be said either.” – There are still a few unknowns. At the moment, in my opinion, the biggest unknown is economic policy China he noted.

PKO BP economists expect the first interest rate cuts to take place in 2023. Their base scenario predicts a decline of 50 basis points. This would mean that the reference rate will go down to 6.25% this year.

At the beginning of January, the Monetary Policy Council did not change interest rates. The main NBP rate, the reference rate, remained at 6.75%.

PAP/Maciej Zielinski

LIBOR ‘falls faster than we expected’

In recent weeks, the WIBOR ratios, which determine the interest rate on the loan, and thus the amount of monthly installments, have gone down noticeably. WIBOR 3M is 6.95 percent, the lowest level since June 21 last year, then it was 6.94 percent. WIBOR 6M is also falling, which is 7.06 percent.

WIBOR “is falling faster than we expected,” said Ireneusz Dąbrowski. – The parameters of the financial markets are improving significantly, the interest rate on our bonds has fallen significantly, the zloty has strengthened significantly – he mentioned.

Read also: Good news for borrowers. The installments of some loans will fall

Bread prices

The MPC member was also asked in RMF FM whether he had seen bread for PLN 2.99 in his shop. – Yes, I’ve even seen a cheaper one, probably PLN 2.69 – said Dąbrowski.

– I’ve seen lower prices, I won’t mention the chain, but I’ve also been to delicatessen – I won’t mention the name either, there are several in Warsaw – where the prices are slightly higher and I checked the prices of bread there out of curiosity. The cheapest bread in this delicatessen was also below PLN 4, interestingly, it was included in the price of a croissant – he added.

The President of the National Bank of Poland and at the same time the chairman of the Monetary Policy Council, Adam Glapiński, said last Thursday during a press conference that there are false information about prices in the media, including bread prices. – That’s why I went to the store nearby, because normally my wife does her shopping. So I took the receipt and I have it. Bread near me costs PLN 2.99. After this conference, my vice-president, my first deputy, also went to her shop near Warsaw. And there he even has bread for PLN 2.64 – said the head of the central bank. He noted that he was talking about Balton bread.

Main photo source: Pawel Bednarz/Shutterstock

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