Polish Central Bank Anticipates May Rate Reduction
WARSAW (Reuters) - It is highly likely the central bank of Poland will cut rates in May and that this year's reduction in the cost of credit could reach 50-100 basis points, central banker Ludwik Kotecki told private broadcaster TOK FM on Friday.
The National Bank of Poland has kept its main interest rate at 5.75% since October 2023.
However, on Wednesday, NBP Governor Adam Glapiński abandoned his previously hawkish views and did not rule out cutting interest rates as early as May.
"It seems that it is very, very, very possible. And the argument that will prevail will of course be the March data on the economy (will be published in April)," Kotecki said.
"I have been saying for months that doves hatch from these hawk's eggs, and they did hatch ... And there are quite a lot of these doves in this council."
Kotecki maintained his position that this year the scale of interest rate cuts in 2025 could amount to 50-100 basis points, and next year they could fall by another 100 basis points.
"This economy needs interest rate cuts," Kotecki said.
"The situation is better from the point of view of inflation and yet weaker from the point of view of the real economy. Therefore, there are strong arguments to start talking about these cuts, because 5.75% (the main interest rate) with such data is clearly too much."
The Monetary Policy Council member also said the Polish economy may not suffer any direct consequences initially from the introduction of new customs tariffs by the U.S., but their indirect effects may become visible next year.
(Reporting by Pawel Florkiewicz and Alan Charlish; editing by Barbara Lewis)
