“There is room for another rate cut, and I think it may not be the last one. March will be a very good moment to make another cut of 0.25 percentage points.” – said Ludwik Kotecki, a member of the Monetary Policy Council (RPP), which co-decides on the level of interest rates.
He added that he saw no need to cut rates further by 0.5 percentage points immediately, because “we are close to the target level of rates, i.e. 3.75-3.50 percent.“, which in his opinion “the MPC should stay for longer”.
See also: Reductions in Monetary Policy Council interest rates and the zloty exchange rate. What does this mean for your wallet?
Ludwik Kotecki pointed out that the next important point after the inflation projection will be the adjustment of the CPI basket by the Central Statistical Office, which will take place in mid-March, i.e. after the next meeting of the Monetary Policy Council. In his opinion, logic and historical basket revisions indicate that the new CPI weights will not affect inflation at all or to a very small extent, and if they do, they will probably reduce it again.
“If this were the case, then April could be another month with a rate cut of 0.25 percentage points. and this would probably be the target level“- he added.
In Ludwik Kotecki's opinion, at this point the rate cuts are stronger than 0.25 percentage points. would suggest that the Council needs to unusually loosen monetary policy for some reason that is currently not visible. However, in his opinion, this does not mean that such a reason could not arise, e.g. if the data and forecasts showed inflation at the end of the year and in the longer term clearly below 2%.
What about inflation in Poland? Ludwik Kotecki about projection
“Currently, however, everything indicates that the March projection will confirm inflation at 2.0-2.5%. in the following months of this year and the annual average is probably slightly below our target of 2.5%. If this is the case, the target rate could be 3.50 percent, and if we wanted to be a bit more conservative, 3.75 percent,” said the MPC member.
See also: The Monetary Policy Council forecasts inflation in line with the NBP target
The next MPC meeting is scheduled for early March. The decision of this body will be announced on Wednesday, March 4.
