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Interest rates in Poland. The voting results of MPC members from December 2023 are available

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In December, at the meeting of the Monetary Policy Council, a motion was made to increase interest rates by two percentage points, supported only by Joanna Tyrowicz, member of the Monetary Policy Council, the National Bank of Poland reported. The remaining MPC members were against.

The NBP reference rate from October 5, 2023 is 5.75 percent. It has fallen by a total of 100 basis points in the past year. This is the result of two decisions of the Monetary Policy Council from the second half of 2023.

In September, the Monetary Policy Council decided to lower it NBP interest rates by 75 basis points. This was the first interest rate cut since May 2020. In October, the Monetary Policy Council cut rates by another 25 basis points.

There were no further reductions. In the following months, the Monetary Policy Council kept interest rates unchanged.

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NBP reference ratePAP/Mateusz Krymski

The majority of the Council did not want the increase

On Wednesday, the NBP announced that during the December meeting, the Council rejected a motion to increase rates by two percentage points.

Only Joanna Tyrowicz voted in favor of the request for a raise. The remaining members – Adam Glapiński, Ireneusz Dąbrowski, Iwona Duda, Wiesław Janczyk, Cezary Kochalski, Ludwik Kotecki, Przemysław Litwiniuk, Gabriela Masłowska and Henryk Wnorowski were against.

Since Joanna Tyrowicz joined the Council, i.e. in October 2022, she has already unsuccessfully submitted applications for a rate increase several times. However, the proposals did not receive the support of the majority of MPC members.

The next MPC meeting is to be held on February 6-7 (Tuesday-Wednesday). Most economists, however, estimate that the Monetary Policy Council will refrain from making any move regarding interest rates for now.

Monetary Policy Council – compositionPAP/Maciej Zieliński

Discussion in the Council

The discussion during the December meeting was described in the announcement of the Monetary Policy Council of January 11.

“Council members emphasized that the annual price dynamics in the environment of the Polish economy was still decreasing, although in many countries it was still elevated. In the euro area, inflation, including core inflation, fell more strongly than forecast. Price dynamics in the countries of the region were also decreasing. Central and Eastern Europe, although it is higher than in developed economies,” we read.

“It was pointed out that in the conditions of falling inflation, most central banks in developed economies had recently kept interest rates unchanged after their previous increases. It was pointed out that market expectations indicated the possibility of interest rate cuts in major economies in 2024, although it was also emphasized that these expectations were subject to uncertainty,” the Council reported.

It was noted that some MPC members were in favor of a more restrictive monetary policy.

“An opinion has emerged that, given the persistently high annual price dynamics and increased inflation expectations, the level of NBP interest rates is too low to ensure the return of inflation to the target in the medium term and the reduction of inflation expectations to levels consistent with the medium-term inflation target,” it was described.

Main photo source: Albert Zawada/PAP

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