Today Poland's Monetary Policy Council (RPP) is due to announce its decision on interest rates in a much-anticipated move.
Though the rate-setting council signaled it would switch to a wait-and-see mode after cutting rates by 50 basis points in March, many economists now expect it to slash rates again, after dismal PMI numbers were released last week and inflation remains low. The government, banks and think-tanks have all been revising their economic growth forecasts for Poland downward – most to below the 1.9 percent Poland recorded both last year and in 2009.
“Even though the NBP has been surprisingly hawkish over the past year, we think that the majority of Monetary Policy Council members have now come to the conclusion that there are no real inflation pressures in Poland,” Danske Bank economists wrote in a comment. They added that “a 25bp rate cut is unlikely to move the markets much, while if we are wrong and the NBP keeps rates unchanged then it would likely push up Polish rates and yields and lead to a strengthening of the zloty.”
Bank Zachodni WBK analysts also wrote that the RPP is unlikely to remain in the wait-and-see mode. “First, the recent and the upcoming macroeconomic data do not herald a fast and strong recovery. Second, these weak macro statistics already led the European Central Bank to act, which may be important for some MPC members from the point of view of rates disparity,” they wrote. Taking into consideration CPI forecasts, they wrote that their view “is for 50bps more in rate cuts (in total) until July.”
From Warsaw Business Journal
RPP to keep rates unchanged until H2 2014?
Gilowska resigns from rate-setting Monetary Policy Council
Pension reform will boost economy - RPP member
Will RPP make another 25-point rate cut?
RPP cuts interest rates by 25 bp, as expected
Will cabinet reshuffle save PO?
BY Remi Adekoya
What’s next for Jarosław Gowin?
BY Remi Adekoya