We are approaching the last decision of the Monetary Policy Council on interest rates for this year. Can we expect a “gift” from the MPC? Most economists largely agree – interest rates will remain unchanged, and therefore at the level of 5.75%, where they have been since October last year – comments Tomasz Gessner, chief analyst of Tavex.
When if not now?
All borrowers ask themselves when there is a chance of lowering the price of money. In this context, it is worth mentioning the November conference of the president of the National Bank of Poland, who suggested that a necessary condition to consider reducing interest rates is to halt the inflation growth, as well as a proposal from the macroeconomic projections of the National Bank of Poland indicating that inflation in the horizon of the next quarters will be heading towards the NBP’s goal.
Considering the latest projection of macroeconomic data, it might turn out that the topic of the first interest rate cut in Poland will appear at the March meeting. Additionally, we may also find ourselves beyond the inflation peak at that time. Also, at the corporate level, there are already signs of slowing down wage growth dynamics, which will partially relieve inflation pressure, for instance from the wage-price spiral mechanism.
Geopolitical uncertainty
The scenario of continuing the cycle of monetary policy easing initiated last autumn could, however, be disrupted by the still smouldering geopolitical risks beyond our eastern border. If Poland were to be actively drawn into this conflict, effectively becoming a party to it, the zloty could come under significant pressure. Its weakening, in turn, would start to act pro-inflationary again, as imported goods would become increasingly expensive for us. At the same time, as a result of the rising geopolitical and geo-economic uncertainty of our region, the entire business environment would significantly deteriorate, so the weakening of the zloty would not necessarily benefit Polish exporters to the same extent as in a stable economic environment.
Source: https://managerplus.pl/kredytobiorcy-bez-prezentu-na-swieta-ostatnia-decyzja-rpp-w-tym-roku-96275
