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Monetary Policy Council to Hold Rates Steady Amidst Fiscal Stimulus, Credit Expansion

FINANCEMonetary Policy Council to Hold Rates Steady Amidst Fiscal Stimulus, Credit Expansion

The current political and economic situation reaffirms my belief that there will be no changes to interest rates at the upcoming meeting of the Monetary Policy Council (RPP). This is also supported by the actions of the new government, which by fulfilling election promises, namely the adjustment of the 500+ program to 800+ and raises for education and public administration workers, is injecting subsequent billions of zlotys into the market. These mentioned factors, plus the planned inflow of funds from the Operational Program Infrastructure and Environment (KPO), in my opinion, will not encourage further cuts and the achievement of the inflation target in the long term.

Another factor, this time from the credit market, that may influence this, is the announced next tranche of the Safe Credit 2% program, which is another tranche of support for potential borrowers wanting to buy their first apartment. If this indeed happens, it will further stimulate the construction sector and pour subsequent billions of zlotys into the market, and as we know, to quell inflation we need to curb, not stimulate, the money supply in the market.

Unfortunately, the political factor and a particular cohabitation of the new Polish government and the President of NBP, elected in the previous term by a different political environment, cannot be overlooked as well.

Grzegorz Aleksandrowicz, financial expert at Lendi

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