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Sunday, May 19, 2024

MPC decision on interest rates. Comments. “It will be interesting in March”

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The market is pricing in the first interest rate cut this year. But we still disagree. Easing only in 2024 – mBank analysts wrote in a commentary to the Wednesday decision of the Monetary Policy Council. “The most interesting will be in March” – commented PKO BP economists.

The Monetary Policy Council at a two-day meeting that ended on Wednesday did not change interest rates. Thus, the main NBP reference rate remained at 6.75 percent, the lombard rate was maintained at 7.25 percent, and the deposit rate is still at 6.25 percent. The rediscount rate is still 6.8 percent. and the discount rate on bills of exchange – 6.85 percent.

Rates unchanged. “It will be interesting in March”

mBank analysts wrote on Twitter that “the market estimates that there will be the first rate cut this year. These expectations will persist for some time. But we still disagree. Easing only in 2024”.

Economists from Bank PKO explained, referring to the decision of the Monetary Policy Council, that “March will be the most interesting”. Then the next projection will be published by the NBP inflation and GDP.

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Analysts from ING Bank Śląski assessed that “the MPC is waiting for the CPI data for January and February and the March macroeconomic projection”.

“The rate of disinflation will be crucial for further decisions of the Council. We believe that persistently high core inflation will not allow for interest rate cuts in 2023, despite a clear fall in inflation,” they added.

This is the fifth month in a row without a decision to change interest rates. The last change – an increase – took place in September 2022. Although the MPC did not announce that the cycle of interest rate increases was over, according to economists more interest rate increases won’t be anymore.

Main photo source: MOZCO Mat Szymanski – stock.adobe.com

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