The Polish Monetary Policy Council (MPC) will probably remain in a wait-and-see mode for a while and could return to interest rate cuts later, central bank Governor Adam Glapinski said on Thursday after the bank cut the main interest rate.
Poland's central bank cut its main interest rate (PLINTR=ECI), opens new tab by another 25 basis points to 4.00% on Wednesday, in line with most analysts' expectations, after November inflation came in lower than forecast.
The NBP has now cut rates six times this year, by a total of 175 basis points, and may continue easing monetary policy next year. "The outlook is good... I think the council will want to move to a wait-and-see approach to see how all the cuts we've made are working, and then proceed with further cuts," he said during a press conference.
"The current rate of 4.0% is perfect at this point. Whether we can go down to 3.75 or 3.50 depends on other council members... There definitely won't be any sudden moves." He added that the bank needed to act with caution and that a high budget deficit limited the scope for further rate cuts.
The National Bank of Poland targets inflation of 2.5% plus or minus one percentage point, and Glapinski said he expects CPI to stay in that range "in coming years." A flash estimate from the statistics office showed inflation fell to 2.4% in November year-on-year, down from 2.8% in October and below the 2.6% expected by analysts.
