16% inflation fails to impress the Monetary Policy Council
12:52
The recent rise in inflation is unlikely to encourage the Monetary Policy Council to turn up the pace again in the interest rate hike cycle. We have more and more statements from Council members suggesting that they prefer a softer approach. Przemysław Litwiniuk said that the baseline scenario at next week's Council meeting would be a 25bp hike, although he did not rule out a larger hike. However, another member of the Council, Miroslaw Kochalski, said he sees room for further rate hikes, but on a smaller scale than so far. The last rate hike in July was by 50 bps, and there have also been earlier ones of 75 and 100 bps. A 25bp rate hike would be the first such small move in Poland's eleven-month-long cycle of raising the cost of money.
A day earlier, another MPC member, Ludwik Kotecki, said that the room for maneuver was limited and that rates could not continue to rise at a fast pace due to the strong economic slowdown. And the NBP itself indicated on Twitter that inflation exceeding 16 percent is no reason to change plans, as it is in line with earlier forecasts.
