The Monetary Policy Council will leave interest rates unchanged at today’s meeting, PKO Bank Polski analysts say
According to them, the discussion about monetary easing could return in March when inflation and GDP projections are released and when the shape of fiscal policy is known.
“The focus of attention today will be on the outcome of the MPC meeting, although there is little indication that monetary policy parameters will change. The pace of disinflation is slowing, consumer demand is recovering, and MPC members’ willingness to reduce inflation Interest rates have fallen markedly. This is accompanied by great uncertainty about the regulations on the shape of fiscal policy. We assume that the Council will leave the benchmark interest rate at 5.75 percent, that monetary policy will be calm in the coming months and that the discussion on possible changes in interest rates could return in March, when the prospects for fiscal policy, at least in the short term, will be known and the new NBP projection for GDP and inflation will be known,” we read in the bank’s economic magazine.
S&P Global Ratings ruled last week that the Monetary Policy Council will keep interest rates unchanged until next spring to gain more clarity on the impact of fiscal policy and economic growth on inflation. The agency expects inflation to move closer to the 2.5% target. +/- 1 percentage point in 2025
November. MPC: Interest rate unchanged
In November, the Monetary Policy Council kept rates unchanged after cutting them by 25 basis points in October – in the case of the key benchmark rate: to 5.75%.
According to money.pl, most experts did not expect such a decision from the Council. Let’s not forget that the Monetary Policy Council cut rates by 25 percentage points in early October. – in the case of the main reference rate: up to 5.75%, in line with consensus market expectations. In September, the country decided to lower interest rates for the first time: by 75 percentage points. up to 6 percent in the case of the reference rate.
– I am convinced that there are no reasons at this time to pursue another interest rate cut. We will find out in the November projection whether there will be reasons to tighten policy, said Przemysław Litwiniuk, member of the Monetary Policy Council, in an interview in October.
According to him, the projections will show the first signs of economic recovery. – This is a factor that the government will enjoy and the Monetary Policy Council less, for example due to the fact that the increase in consumption will contribute to a change in the path of disinflation – he said.
Source: Do Rzeczy
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
