WARSAW (Reuters) – Poland’s central bank held its main interest rate at 6.75% on Wednesday, ahead of an expected sharp fall in inflation in the coming months.
After soaring to levels unseen since the 1990s, inflation in emerging Europe’s largest economy eased in March. The central bank’s Monetary Policy Council (MPC) now hopes that the rate hikes it has already implemented, combined with a global slowdown, will see price growth return to single digits before the end of the year.
“The MPC clearly communicates its willingness to keep interest rates unchanged and data published last month do not change this attitude,” said Grzegorz Maliszewski, chief economist at Bank Millennium.
Inflation in March was 16.2% compared to 18.4% in February, according to statistics office data.
All of the analysts in a Reuters poll had forecast rates would remain unchanged, a trend economists expect to continue until the end of the year.
Central bank governor Adam Glapinski has said that he expects inflation to fall to single digits around the beginning of September, paving the way for interest rate cuts in the fourth quarter.
Investors are now waiting for more insight into the central bank’s thinking when it releases a press release at 1330 GMT and Glapinski holds a press conference on Thursday.
“I do not expect a significant change in the narrative of the MPC’s stance, although taking into account the March CPI reading…the Council’s assessment of inflation prospects may be interesting,” Maliszewski said.
Other central banks in the region have also opted to leave rates unchanged in recent months as they balance risks to growth from the war in Ukraine against high inflation.
On Tuesday, Romania’s central bank kept its benchmark interest rate at 7.00%.
Source: Economy - investing.com
