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Interest rates – September 2023. The Monetary Policy Council surprised economists – Małgorzata Starczewska-Krzysztoszek and Kazimierz Krupa comment

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Interest rates fell 75 basis points on Thursday. This is the result of the decision of the Monetary Policy Council (MPC), which surprised economists. – This seems crazy, because no one expected it – commented Kazimierz Krupa, an economic publicist from the Drawbridge law firm, on TVN24. In the opinion of economist Dr. Małgorzata Starczewska-Krzysztoszek, the MPC’s decision “will have very serious consequences for the entire economy.”

During the September meeting, the Monetary Policy Council decided to lower it NBP interest rates by 75 basis points. The resolution on this matter entered into force on Thursday. The reference rate decreased from 6.75%. up to 6.00 percent This is the first interest rate cut since May 2020.

In Kazimierz Krupa’s opinion, the MPC’s decision can only be interpreted politically in connection with the upcoming parliamentary elections. – These are dilettantes and cynics in action who, in order to maintain the power of the party that gives them jobs, are ready to set fire to Poland and do so – said the economic journalist.

Read also: Will there be more interest rate cuts? New forecasts

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The Monetary Policy Council surprised economists

– This seems crazy, because no one expected it and since yesterday I have been observing such splits performed by outstanding economists (…) who are trying to find any rational premises here. They won’t notice it because there is no way, he said.

– The most tragic are the comments of Western economists who say: “yes, Poland has it inflation above 10 percent, core inflation above 10 percent, and reduces interest rates.” This is where the comment ends, Krupa added.

PAP/Maciej Zieliński

The economic journalist pointed out that the effects of the MPC’s September decision “will be manifold.” The zloty began to weaken rapidly. Thus – as Krupa pointed out – we will stimulate prices. – Our debt increased by several billion in one day, so the borrowing needs for next year, which are absolutely record high in the times of free Poland, at over PLN 300 billion, will be even greater – he noted.

In the opinion of the economic journalist, it will be a “benefit” for the President of the National Bank of Poland, Adam Glapiński, that “he will be able to say at the end of the year that the National Bank of Poland is profitable.” – Profits resulting from the revaluation of reserves, i.e. the National Bank of Poland will not earn a single zloty, but it will show a profit because the reserves revalued after the reduced, depreciated zloty will be higher and the money will go to the budget – explained Kazimierz Krupa.

“This is an absolutely pro-inflation decision”

In his opinion, “the government has stopped fighting inflation, and the National Bank of Poland proved yesterday that it actually stimulates it.” -Who benefits from inflation? Everyone loses, the government earns because it has greater revenues, so this greater tax collection is not due to any efforts of tax offices, but increased revenues due to inflation. It’s bigger VAT etc. – he said.

In Krupa’s opinion, PLN borrowers will also lose due to the MPC’s decision, despite the reduction in monthly installments of their liabilities. – This is just a lie. 25-30 percent of families in Poland have loans. If it is the 10 or 12 million, then 26 million have no loan. However, the borrower who saves PLN 200 or PLN 300 will pay PLN 400 or PLN 500 twice as much in a store or at a gas station. This is the illusion of savings, the illusion that he will make money – explained the TVN24 guest. – We will all lose from this – summed up Kazimierz Krupa.

Małgorzata Starczewska-Krzysztoszek, an economist from the University of Warsaw, pointed out that the Monetary Policy Council put the Polish economy “in a very difficult situation”. – I think that the Monetary Policy Council and its chairman, the president (of the National Bank of Poland – ed.) Adam Glapiński, have put us in a very difficult – I am thinking about the economy – situation. This is an absolutely pro-inflation decision, i.e. inconsistent with the mandate of the National Bank of Poland and the Monetary Policy Council – she commented in “Wstańsz i pozna” on TVN24.

According to the economist, the MPC’s decision “will have very serious consequences for the entire economy.” – Monetary policy, for which the Monetary Policy Council is responsible, is one of the foundations of the economy, it has been violated. If you disturb the foundations of a house, you don’t know how it will end, whether there will be a serious catastrophe – pointed out Starczewska-Krzysztoszek.

Main photo source: Shutterstock



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