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Reduction of interest rates. The MPC member presents her position

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NBP interest rates in Poland remain unchanged from September 8, 2022. Member of the Monetary Policy Council, Gabriela Masłowska, would vote for a reduction in interest rates in September if a motion to this effect was presented at the MPC meeting. Masłowska added that she did not want to predict the scale of a possible reduction.

– It was to be expected that the pace of decline was decreasing inflation it will get weaker. Nevertheless, we have a downward trend, quite persistent, for many months. It seems that nothing will stop this downward trend, especially since we are also dealing with it in other countries around Poland. If the downward trend in inflation continues and other macroeconomic factors do not change radically, I mean in particular the weak growth rate GDP abroad, as well as the weakening domestic economic situation, this is a reason to discuss lowering interest rates – said Masłowska.

A private opinion, not the position of the Monetary Policy Council

– I emphasize that I do not speak on behalf of the Council, I only present my personal opinions. In my opinion, there are reasons to lower interest rates. If there was a motion to cut rates at the MPC meeting in September, I would vote for this motion, she added.

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Masłowska would not like to predict the scale of the reduction in September, because this will only be preceded by a thorough analysis of all the data that NBP analysts will provide to the Monetary Policy Council before the meeting.

Gabriela MasłowskaEast News

– In the face of great uncertainty, it is difficult to say what scale of reductions would be appropriate throughout 2023 – she added.

The next MPC meeting is scheduled for September 5-6. It was postponed twice: first to September 12-13, and then to the initial date of September 5-6.

Inflation is still two percent

Prices of consumer goods and services in August 2023 increased by 10.1% y/y. compared to 10.8 percent a month earlier. The market expected a reading of 10.0 percent.

The President of the NBP, Adam Glapiński, announced in July that the Monetary Policy Council had formally ended the cycle of rate increases, and the next steps would be their reductions, in gradual steps of 25 bp. As he pointed out, two conditions are needed: current inflation below 10%. and predictions for the coming quarters/years that CPI will decline rapidly. He noted that under appropriate conditions, a rate cut could take place as early as September.

Inflation in PolandPAP/Mateusz Krymski

Read also: Still double digits. There are new data on inflation in Poland

The description of the discussion from the decision-making MPC meeting in July stated that some members of the Council indicated that in the coming months it might be justified to consider reducing NBP interest rates.

Monetary Policy Council – compositionPAP/Maciej Zielinski

Main photo source: MOZCO Mateusz Szymanski/Shutterstock



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