Poland Signals Pause on Interest Rate Cuts
Michael RossPoland's central bank chief indicates an end to its rate-cutting cycle as inflation comes under control, with only minor adjustments expected.
Poland's central bank governor, Adam Glapinski, has indicated that there is limited scope for further interest rate cuts, signaling that the recent easing cycle may be drawing to a close as inflation comes under control.
Minor Adjustments Remain Possible
Speaking to reporters on Thursday, Glapinski stated that policymakers might consider minor "fine-tuning" adjustments. Any additional cuts would likely be in 25-basis point increments and could occur as early as February or March, depending on incoming economic data.
Glapinski projects that the main interest rate will ultimately stabilize around 3.5%. However, he acknowledged that some members of the 10-person Monetary Policy Council might favor an even lower rate. This statement follows the central bank's decision on Wednesday to hold its benchmark rate at 4% after implementing five consecutive cuts in the second half of last year.
Inflation Slowdown Underpins Policy Shift
The central bank's move toward monetary easing was a response to a significant slowdown in inflation, which fell from nearly 5% at the beginning of last year to 2.4% in December. This period also saw wage growth decelerate to single-digit figures.
According to the central bank's November forecasts, the annual average inflation for the current year is expected to be 2.9%, placing it within the target range and reducing the need for further aggressive rate reductions.
