In a few hours, we will know the decision of the Monetary Policy Council regarding interest rates. The rates were last changed exactly a year ago and since then, the price of money has remained at 5.75%. In the context of today’s decision, the market consensus assumes that the rates will remain unchanged – comments expert Tomasz Gessner, the chief analyst of Tavex company.
The Monetary Policy Council is currently in a somewhat uncomfortable situation, as we see a clear shift towards looser monetary policy worldwide. Interest rates have already been lowered by many major central banks, such as the European Central Bank or the recently Federal Reserve, and that immediately by 50 bp. Last week, China also announced a stimulus package for its economy worth over $114 billion USD.
Although decisions by the world’s largest central banks would seem to favor a reduction in rates by the MPC, the recent data on inflation can cause concern. According to preliminary estimates, the CPI index for September has already increased to 4.9%, so it is moving away from the goal of the National Bank of Poland again.
It’s worth noting that while we’re still dragging the July removal of the anti-inflation shield and the thawing of energy prices behind us, the pro-inflationary impulse is balanced by a stronger zloty and relatively cheap oil in world markets. However, we must remember about the big geopolitical risks in the Middle East and on the Ukraine-Russia line, not to mention NATO-Russia. Escalation of tensions in the former can affect the rise in oil prices, while tensions in our geographical region can result in a noticeable weakening of the zloty. This would therefore be a system once again creating strong inflationary pressure in Poland.
Everything therefore indicates that we will have to wait for interest rate cuts in Poland until inflation is anchored in the NBP target, or at least within the permissible deviations from it.
Source: https://managerplus.pl/za-kilka-godzin-decyzja-rpp-o-stopach-procentowych-rynki-przewiduja-brak-zmian-11672
