Rates maintained – the president of the NBP comments. Prof. Adam Glapiński on the economic situation
In February, for the second time this year, the Monetary Policy Council extended the pause in the “non-cycle” of NBP interest rate cuts. We invite you to read the report from the conference of the President of the National Bank of Poland, Prof. Adam Glapiński, during which he will present the background of Wednesday's decision. What are the prospects for further easing of monetary policy and the assessment of Poland's economic situation from the perspective of the head of the NBP?
On Wednesday, February 4, the Monetary Policy Council decided to leave the interest rates of the National Bank of Poland unchanged. They are shaped as follows:
- reference rate 4.00% per annum;
- lombard rate 4.50% per annum;
- deposit rate 3.50% per annum;
- rediscount rate of bills of exchange 4.05% per annum;
- bill of exchange discount rate 4.10% per annum.
However, the second decision in a row to keep the NBP interest rates in place was not obvious to economists. “In the PAP Biznes survey, the votes were almost split. Half of the respondents expected no changes in interest rates, and half expected their reduction,” reported Krzysztof Kolany, chief analyst of Bankier.pl.
Wednesday's decision of the Monetary Policy Council and the current assessment of the economic situation in Poland will be presented at a conference of the President of the NBP, prof. Adam Glapiński. Welcome to the Bankier.pl report
The final data confirmed that in December inflation amounted to 2.4%, so it was practically in the middle of our inflation target of 2.5% +/- 1% – President Glapiński began the conference.
The International Monetary Fund stated that the restrictive policy of the National Bank of Poland led to the control of inflation in Poland and assessed the Bank's current activities positively – said Adam Glapiński.
You could say that we are leaders in disinflation. Inflation in Poland is among the lowest in the Central and Eastern European region. […] At the same time, today we have the highest economic growth in the region, he continued.
Our real GDP is now over 17% higher than before the pandemic. Most countries can dream of such a result. We have left all other countries behind. These results show that the foundation of economic success is our own currency and the independence of the central bank, he emphasized.
Importantly, today, all forecasts show that the return to the inflation target is permanent. As for the coming months, forecasts indicate that inflation may decline in the first quarter, said the president of the NBP.
Since May last year, we have reduced interest rates by 175 basis points. – this strong reduction in interest rates supports economic growth, loan holders and debt servicing – emphasized Adam Glapiński.
How will the Monetary Policy Council decide on interest rates in March?
Referring to Wednesday's decision of the Monetary Policy Council, President Glapiński stated that “in the absence of information on inflation, the Council decided to leave rates unchanged.” Prof. Glapiński emphasized that in March the Monetary Policy Council will already know the inflation data for January and new information from the labor market.
“As for the coming months, we will continue to monitor the data and make decisions based on the incoming information. We will continue to act to maintain low inflation and support economic growth,” he added.
“In March, we will already know the preliminary data from the Central Statistical Office on inflation in January. Moreover, it will be clarified whether the beginning of the year will bring the expected decline in the dynamics of wages in enterprises. We will also get to know the March projection, which is the most important indication for us. The March projection will outline the expected course of economic and price processes, after taking into account the effects of our reduction in interest rates,” he pointed out.
In turn, in mid-March we will know the results of the revision of the inflation basket by the Central Statistical Office. This basket changes every year and sometimes causes significant changes in the level of inflation – noted President Glapiński.
Today, we are happy that inflation has been restored to the target and that, according to all internal and external forecasts, it is to remain within the target – concluded the President of the NBP, moving on to questions.
