The Monetary Policy Council (RPP) decided in March to lower interest rates by 25 basis points, bringing the reference rate down to 3.75%.
Just a week ago, such a decision appeared almost certain. It was supported by macroeconomic data, particularly low inflation readings and weaker wage growth, as well as fairly clear signals from some members of the Monetary Policy Council indicating readiness to ease monetary policy.
However, the situation became more complicated following weekend developments in the Middle East. A sharp rise in the prices of crude oil and natural gas has increased the risk of cost pressures in the coming months. At the same time, the weakening of the Polish złoty against major currencies has added further uncertainty regarding the future path of inflation. Under these conditions, the scope for further interest rate cuts becomes less obvious.
At this stage, given the rapidly changing external environment, it is premature to make clear forecasts about the Council’s next decisions. This uncertainty is also reflected in market pricing. Interest rate futures have begun to factor in only the March rate cut, significantly reducing expectations for additional moves in the short term.
The coming days will be crucial for assessing the outlook. Investors will closely watch the revision of the inflation basket by Statistics Poland (GUS), the March inflation projection from the National Bank of Poland (NBP), and the press conference by NBP Governor Adam Glapiński. These events may significantly clarify the trajectory of monetary policy in the months ahead.
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Source:
https://ceo.com.pl/rpp-obniza-stopy-do-375-proc-rynek-ogranicza-oczekiwania-na-kolejne-ciecia-58412
