The capping of electricity prices will be extended by the end of the year in Poland, Motyka Minister Motyka said on Friday, which could eliminate an inflation risk and increase hopes for a basic interest reduction.
The capping of electricity prices will be extended in Poland. Photo shutterstock
Electricity prices will be frozen at the level of 500 zlots ($ 137) for a megawatt/hour in the last three months of the year, said Motyka, quoted by Reuters.
The measuring measure of electricity prices for domestic consumers would expire in October, and the National Bank of Poland mentioned it as a risk factor and a source of uncertainty.
Last month, Polish President Karol Nawrocki rejected a draft law for relaxing the norms for the construction of onshore wind parks, which also included regulations regarding the extension of the price ceiling measure. The president sent the Parliament with a draft law that included only the proposal aimed at freezing prices.
Now, the Warsaw Executive has prepared a new legislative project aimed at freezing prices in the fourth quarter and included a subsidy, which depends on the salary, paying the heating invoices. Motyka said the project will be sent to Parliament this month, adding that it does not think that new extensions will be needed.
]In our opinion, we will no longer need to freeze prices, because we expect energy prices to fall below 500 zloti per mwh “said Milosz Motyka.
Immediately after these statements, financial markets have become more confident that the reference interest will be reduced in the coming months.
]The market has become convinced that this discount can take place “said the economist from Santander Bank Polska, Piotr Bielski. He did not exclude a reduction in interest at the monetary policy meeting in October, but he appreciated that most likely the decision makers will wait for the next inflation report, which will be published in November.
