The Monetary Policy Council has yet again decided to keep the rates constant after last year it broke away from the series of rate hikes aimed at curbing spiking prices.
In September, the rate-setting body raised key interest rates for the 11th consecutive time in an effort to temper runaway inflation. The reference rate at the time increased by 25 basis points from 6.50 percent and has remained unchanged since.
Commenting on Wednesday's decision, Monika Kurtek, Chief Economist at Bank Pocztowy, said that it was in line with expert predictions, adding that the interest rates are likely to remain intact until the end of the year.
“The prospects of an interest rate hike remain highly tenuous, with the anticipated trajectory leaning towards a reduction in interest rates,” she said.
Kurtek further remarked that any cuts in interest rates might occur by the end of 2023 or in the following year, dependent on inflation fluctuations following February.
Prices in Poland rose by 17.5% year-on-year in November of last year but this trend has since been gradually declining.
The Polish central bank’s data indicated that inflation in December stood at 16.6% and is set to taper further due to the so-called base effect.
This effect stems from inflation being reported on a year-over-year basis. With last March’s inflation scoring double-digit figures, it set a higher benchmark for this year’s inflation and, as a consequence, is soon expected to lead to a decrease in overall inflation rates.
Some analysts anticipate that both head of the National Bank of Poland and the ruling coalition will be showcasing a base effect-lowered inflation rate in the heat of the election campaign come autumn.
(pjm)
Source: IAR, Rzeczpospolita