Inflation for September will probably be just above 8.5 percent. This means that today inflation is in single digits. Thus, the conditions for interest rate cuts have been met, said the president of the National Bank of Poland, Adam Glapiński, during a press conference on Thursday.
– Today, ladies and gentlemen, is a joyful day, because I can tell you that inflation in Poland today, just like yesterday, when we made the decision as the Monetary Policy Council, is already in the single digits – Adam Glapiński began the conference.
He explained that “the inflation that is quoted is the annual inflation, the CPI, and is the inflation that includes the average index for the whole month.”
– Of course, we use our models to observe inflation from day to day, but we do not disclose it to the public, because it is variable – he added. He noted that “inflation for September will probably be slightly above 8.5 percent.”
– And this means that today inflation is single digit. Therefore, the conditions (cutting interest rates – editor) were met – said the head of the NBP.
The Monetary Policy Council’s decision to reduce interest rates
On Wednesday, the Monetary Policy Council (MPC) decided to lower the rates NBP interest rates by 75 basis points – announced in Wednesday’s announcement. The reference rate will drop to 6.00 percent.
Most economists of the largest banks in Poland expected a reduction in interest rates, but on a smaller scale – by 25 basis points.
PAP/Maciej Zieliński
From October 2021 to September 2022, the Monetary Policy Council increased the reference rate 11 times in a row, by a total of 665 basis points to 6.75%. and until Wednesday, September 6, it remained unchanged. This was the highest level of rates since the end of 2002 and the fastest rate of rate increases in Poland in the history of the Monetary Policy Council.
During the COVID-19 pandemic in spring 2020, the Monetary Policy Council cut the main rate to a record low of 0.1%. Before the pandemic, until March 2020, the reference rate was kept at 1.50% for 5 years.
Interest rates in Poland
The MPC resolution entered into force on Thursday, September 7. Interest rate levels after Wednesday’s decision:
- reference rate 6.00 percent on an annual basis;
- lombard rate 6.50 percent on an annual basis;
- deposit rate 5.50 percent on an annual basis;
- rediscount rate of bills of exchange 6.05 percent on an annual basis;
- bill of exchange discount rate 6.10 percent on an annual basis.
The next decision-making meeting of the Monetary Policy Council is to be held on October 3-4.
Main photo source: Rafał Guz/PAP