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Further rate hikes rather unlikely, says central bank head

Tytus ┼╗mijewski/PAP

Adam Glapinski, governor of the National Bank of Poland (NBP), has assessed that amid inflation forecasts it has become unlikely that the Monetary Policy Council (RPP), NBP’s rate-setting body, will increase interest rates.

“Taking into account the results of the inflation projection, one might say that further hikes are becoming increasingly less likely,” Glapinski wrote in a letter to the participants of the Banking Forum which started in Warsaw on Wednesday.

At the same time, he added that it is too early to start discussing potential interest rates cuts.

“We need to be sure that inflation will be lastingly declining towards the inflation target,” Glapinski wrote.

According to him, the current level of interest rates “should be viewed as proper.”

On March 8, RPP has kept the reference interest rate at 6.75 percent.

On March 10, the central bank published its inflation forecast for the coming years. According to NBP, the average inflation rate in Poland will reach 11.9 percent this year, 5.7 percent in 2024 and 3.5 percent in 2025.

On Wednesday, the Central Statistical Office reported that the Consumer Price Index, (CPI) hit 18.4 percent year on year in February 2023.

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