July's rate cut is not easing cycle yet, Polish central banker says
The 25-basis-point rate cut announced on Wednesday should not be considered as the start of the easing cycle by the central bank, Adam Glapinski, the governor of the National Bank of Poland (NBP), has said.
On Wednesday, the Monetary Policy Council (RPP), the NBP's rate-setting body, cut all interest rates by 25 basis points, surprising most economists. The reference rate now stands at 5 percent whereas the headline inflation CPI, as seen in a preliminary reading by Poland's statistical office GUS, reached 4.1 percent in June.
At a press conference on Thursday, Glapinski discussed the possible path of inflation, interest rates and public debt.
He said that before further cuts, the RPP would analyse incoming economic data.
"If the circumstances are favourable, nothing prevents a continuation (of interest rate cuts - PAP)," the governor said.
He said inflation had been going down quarter after quarter, with July expected to see inflation returning to the NBP's target range of 2.5 percent plus/minus one percentage point.
Among possible obstacles to monetary policy easing, Glapinski named a potential termination of government subsidies to electricity bills for households, the growth of public debt and the introduction of the EU's updated emission charge ETS2.
On the other hand, a slower wage growth would support the easing cycle, he said.
According to Glapinski, the next interest rate cut is possible as soon as in September. (PAP) jd/mf
