Central bank head says further rate hikes might be unnecessary

On Friday the head of Poland’s central bank, Adam Glapiński, hinted that the bank might end its short cycle of interest rate increases. “Everything indicates that inflation will decline and there will be no need to raise interest rates,” Mr Glapiński said during an interview with private television broadcaster TVN24 on Friday.

His statement is in contrast to what he said just two days before, when the central bank’s Monetary Policy Council raised the reference rate by 0.75 percentage points, exceeding market expectations, to 1.25 percent.

It was the second interest rate hike this year, after a 0.4 percent rise in the main rate a month before.

On Wednesday, the head of Poland’s central bank said that inflation will probably peak at 7 percent in January 2022, and hinted that there is a probability of a third rate hike this year in December.

Continuing with his new line on Friday, Mr Glapinski said that “there will certainly be inflation, but it will be lower than the growth of incomes”.

“The standard of living for Polish people has been rising, which does not mean this is true for everyone and every income group," the central bank head emphasised. He added that “the government must offer some help to the poorest and families whose bills are rising”.