Bank of Poland will not change rates due to economic downturn
2022.12.07 13:30
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Bank of Poland will not change rates due to economic downturn
Budrigannews.com – According to the statement, the National Bank of Poland (NBP) bets that a slowdown in the global economy will assist in bringing inflation under control by maintaining its main interest rate at 6.75 percent on Wednesday.
Central European policymakers have been attempting to stop raising rates in order to avoid stifling economies that have been severely impacted by the war in Ukraine in the face of rising consumer prices and slowing growth.
According to a statement released by the central bank, “The Council assessed that the expected weakening of the external economic conditions, together with monetary policy tightening by major central banks, will curb global inflation and commodity prices.”
“Under such conditions, the NBP’s previously significant tightening of monetary policy will support a decline in inflation in Poland toward the NBP inflation target.”
Statistics office data showing that inflation fell to 17.4% in November from 17.9% the month before and GDP data from the third quarter indicating a slowdown in private consumption bolstered the case for stable rates in Poland.
According to Piotr Bielski, director of Santander’s economic analysis department (BME:), “Since there was no decision to raise rates in the two previous months… the chances for a hike were all the more unlikely now that positive signals in domestic and international data have emerged concerning the inflation outlook.” Bank Polska.
In a Reuters poll, 20 analysts had predicted that the main rate would remain unchanged. Although Adam Glapinski, governor of the central bank, has stated that the cycle is not necessarily over, the majority of economists now anticipate that interest rates will remain unchanged until the end of 2023.
Markets, according to Bielski, will now be looking for indications that “the door to further rate hikes is closing” as well as indications that rate cuts may occur before the end of 2023.
For the third time in a row, the Czech National Bank (CNB) maintained its key interest rate in November. Additionally, the National Bank of Hungary (NBH) pledged to maintain tight monetary conditions for a “prolonged period” by maintaining the same base rate.
