Poland kept borrowing costs on hold for the sixth straight month and predicted inflation will gradually ease from the highest level in a quarter century.
(Bloomberg) — Poland kept borrowing costs on hold for the sixth straight month and predicted inflation will gradually ease from the highest level in a quarter century.
The bank’s rate-setting body, the Monetary Policy Council, held the benchmark rate at 6.75% on Wednesday, in line with the forecast of all 31 economists surveyed by Bloomberg. It didn’t rule out further rate increases, saying its future decisions will depend on economic prospects.Â
In new staff forecasts, the central bank cut its 2023 inflation outlook to 10.2% and 13.5%, while the MPC reiterated that a stronger zloty would help rein in price growth.
With the last three monthly inflation readings coming in below analysts’ expectations, prospects are mounting that central bank Governor Adam Glapinski may soon announce the end of Poland’s tightening cycle. He will explain the decision during a news conference at 3 p.m. in Warsaw on Thursday.
The governor and policy makers have so far refrained from calling a formal halt to the hikes, which took Poland’s key rate up 665 basis points from near zero in 2021.Â
Even as Prime Minister Mateusz Morawiecki has suggested that the central bank may be able to cut interest rates before an election expected in October, his economic-policy adviser, Pawel Borys, warned last week it’s too early to speculate about policy easing.Â
(Updates with a statement the central bank starting in the first paragraph.)
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