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Interest rates – April 2023. The Monetary Policy Council has made a decision, MPC communiqué

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Interest rates unchanged. The Monetary Policy Council (RPP) decided to keep the NBP interest rates unchanged, it was announced in a Wednesday communiqué. The decision is in line with economists’ expectations. The reference rate will remain at 6.75 percent.

On Wednesday, the two-day decision-making meeting of the Monetary Policy Council ended. “On April 4-5, 2023, a meeting of the Monetary Policy Council was held. The Council decided to maintain NBP interest rates unchanged,” the statement reads.

Interest rates in Poland

– the reference rate is 6.75 percent. on an annual basis,

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– Lombard rate is 7.25 percent. on an annual basis,

– the deposit rate is 6.25 percent. on an annual basis,

– rediscount rate of bills of exchange is 6.80%. on an annual basis,

– the discount rate on bills of exchange is 6.85%. on an annual basis.

This is the seventh month in a row without a decision to change interest rates.

PAP/Adam Ziemienowicz

Comments after the decision of the Monetary Policy Council

In the opinion of mBank economists, interest rates will probably remain at the current level at least until the end of 2023. “The MPC ended the meeting with no changes in interest rates. The reference rate is still at 6.75 percent. If the inflation projection comes true to the letter, we do not see room for rate cuts this year. Inflation but it’s over the top. Now the MPC will be more interested GDP“, they wrote on Twitter.

Economists of ING Bank Śląski pointed out that “you can go back and make mazurkas”. “#RPP left rates unchanged. Since the last meeting, a banking crisis has appeared in USA. The market is pricing in aggressive Fed cuts, near-flat ECB rates. Poor data in Poland, inflation has started to fall, the baseline is rising as if nothing happened.

The Polish Economic Institute pointed out that other Central European central banks follow a similar direction of monetary policy as the NBP. “The rate hikes cooled down the credit market and inflation expectations. The GUS business climate surveys indicate weaker price growth forecasts in all industries starting from December. The NBP also indicates that the value of term deposits in February was twice as high as a year ago. This results in a lower propensity to consume” – wrote the think tank.

Nevertheless, PIE expects interest rates to remain unchanged in 2023. “Inflation will exceed 10 percent for most of the year, which effectively closes the room for cuts,” the entry reads.

Grzegorz Baczewski, general director of the Lewiatan Confederation, thinks similarly. “Not so long ago it seemed that we could count on the first rate cuts at the end of the year. But this scenario is becoming less and less likely. Because the decline in inflation will be slower than we expect. The pressure to increase prices in the economy is still there,” he pointed out. Baczewski in the commentary to the MPC decision.

Core, non-covering inflation accelerated strongly energy prices and food. In January it amounted to 11.7 percent, in February 12 percent, and in March it will probably record a new record. And it will continue to be at a high level in the coming months,” he added.

On Thursday there will be a press conference of the president of the National Bank of Poland and at the same time the chairman of the MPC, Adam Glapiński. The conference is scheduled to start at 15.00.

Main photo source: Pawel Bednarz/Shutterstock

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