Today another inconclusive meeting of the MPC. After the personal conflict with the government, members of the Council cannot play to the same goal. Across the ocean – in a similar situation to ours – Chile is lowering interest rates. Optimism in the United States is dying down.
MPC Meeting
For the sake of the chronicle, it is worth noting that today there is a meeting of the Monetary Policy Council regarding interest rates. The previous sentence suggests that this decision is not considered significant, although we are in the middle of a worldwide trend of interest rate cuts. The reason is simple: Poland does not participate in this process, despite currently having some of the highest capital costs on the continent. As for the level of cooperation between the NBP and the government – or rather the lack thereof – it is a worldwide phenomenon. We have interest rates clearly higher than inflation. Instead of lowering them, we will pump millions into the economy, in a housing price growth program, simultaneously pushing down the economy with costly credit, directly resulting from interest rates. Today’s decision should of course be no surprise. There is no analyst expecting anything other than no change. The problem is that if there is not an announcement of cuts in the coming months at the conference, and reductions continue globally, we might quickly see effects on the currency market. The higher the interest rates compared to other countries, the stronger the currency. As a result, exporters squeezed on one side by the high cost of capital will have to deal with a strong zloty, lest they export too favorably.
Data from Across the Ocean
Due to the day off across the ocean on Monday, economic indicators were only published yesterday. Canada scored markedly better than expected, showing as much as 49.5 pts when the expected level was 48.5 pts. This country regularly oscillates just below the 50 pt mark, separating the predominance of positive responses from negative ones. However, the situation in the USA looks worse. Despite the fact that only two months ago optimists were more prevalent, yesterday we saw a result of 47.9 pts. This was also symbolically worse than expected. This is partly why the dollar had a weaker day yesterday.
Chile Lowered Interest Rates
Last night, as expected, Chile joined the countries lowering interest rates. This country lowered the main interest rate from 5.75% to 5.5%. The ill-natured point out that this country has exactly the same interest rates as Poland, but higher inflation, as much as 4.6%, also as in Poland, growing. The markets’ reaction was predictable. Since interest rates are rising, it means that the currency is weakening. That’s exactly what happened yesterday with the Chilean peso.
Today, in the macroeconomic data calendar, it is worth paying attention to:
2:30 pm – USA – foreign trade,
3:45 pm – Canada – decision on interest rates.
Maciej Przygórzewski – chief analyst at InternetowyKantor.pl
Source: https://ceo.com.pl/rpp-w-impasie-swiat-obniza-stopy-polska-w-odosobnieniu-chile-dolacza-do-globalnego-trendu-58748
