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Tuesday, May 28, 2024

Interest rates in Poland – May 2023. Analysts and economists assess the conference of the President of the National Bank of Poland, Adam Glapiński

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The President of the National Bank of Poland (NBP), Adam Glapiński, pointed out that discussions on interest rate cuts are currently premature. According to the economists of Bank Pekao, this does not contradict their forecast that they will start to fall later this year. In turn, ING Bank Śląski analysts are of the opinion that the rate cut will take place in 2024.

President of the National Bank of Poland, Adam Glapiński he said during Thursday’s press conferencethat the more topical question is in what situation the MPC could raise interest rates, and discussions about their reductions are far premature, with the MPC remaining in the wait and see mode. The president added that he would like inflation processes to start discussions on interest rate cuts at the end of this year.

MPC member Ireneusz Dąbrowski recently said in Polsat News that if the process of rapid decline continues inflation, then the Council may seriously consider lowering interest rates after the holidays. Another MPC member, Henryk Wnorowski, spoke in a similar tone in Polskie Radio Lublin. – There is a light at the end of the tunnel that will allow us to talk more and more boldly about interest rate cuts, and this is very good news for all borrowers in our country – pointed out Wnorowski.

On the other hand MPC member Joanna Tyrowicz spoke in “Fakty po Faktach” on TVN24that “there is no way we’re going to hit our inflation target this year.” Tyrowicz assessed that “it would be clearly better for the economy” if the Monetary Policy Council decided to an increase in interest rates.

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“Interest rates will start falling later this year”

“In our opinion, interest rates will start to fall later this year and yesterday’s press conference of the NBP president does not contradict this forecast,” Pekao wrote in Friday’s report

“Firstly, the modus operandi of the MPC is traditionally a lack of commitment to further steps. Secondly, the balance of risk for inflation paths may still be two-sided – the fact that we are talking about a turning point in core inflation in terms of a forecast is an important illustration of this state of affairs. After third, the NBP has already shown that it can turn quickly, so there is enough time until the fall to lay the ground for rate cuts and start them.

According to Pekao analysts, inflation data remains the key to further moves of the MPC and one does not need to be strongly convinced that inflation will return to the target to expect a shallow cycle of cuts. “If at the end of the year the inflation expected next year will be around 5-6 percent, an increase in real rates tightening monetary policy relative to the current state will be enough to induce cuts. The international context is also important – we see the same mechanism in the core markets, but there is space could be even greater.”

Interest rate analysts

However, in the opinion of ING Bank Śląski analyst Adam Antoniak, there will be no conditions for interest rate cuts before the end of 2023. – Our baseline scenario assumes that the NBP will start the monetary policy easing cycle in the second half of 2024. The main message from the NBP president’s conference is: the cycle of interest rate increases has not ended, and talking about lowering rates is premature – he said.

According to the chief analyst of Santander Bank Polska, Piotr Bielski, despite the flood of “dovish” comments from MPC members, which we observed at the beginning of May, the official rhetoric of the central bank has not changed and remains cautious, which – as he noted – is the right decision. – If our inflation predictions turn out to be accurate (and we still see consumer inflation near 10% at the end of this year), there will be no room to start easing monetary policy. It seems that the market valuation of interest rates, assuming the start of cuts already this year, was (again) premature and may start to correct – he stressed.

“A. Glapiński repeatedly emphasized that the issue of possible rate cuts was not discussed at the meeting, and such a discussion would be definitely premature. Although the president strongly emphasized the issue of possible increases, in our opinion it is only rhetoric – it is difficult to imagine the likely circumstances in the current situation, which could induce the MPC to make such a move,” mBank economists wrote in their morning note.

Interest rates in Poland

During its May meeting, the Monetary Policy Council decided to keep NBP interest rates unchanged. The decision was announced on Wednesday.


This is the eighth meeting in a row when the MPC did not change interest rates. The main reference interest rate has remained at 6.75% since September 8, 2022.

Main photo source: Rafał Guz/PAP

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