Further rise in interest rates likely: central bank head

“Today I can say that if the incoming data confirms our current assessment of the economic situation, the likelihood of further interest rate adjustments is greater than keeping them at the current level. However, I emphasise that this is a conditional probability, an assessment for today,” Polish National Bank head, Adam Glapiński, wrote in response to questions posed by the Polish Press Agency (PAP).

He added that at the moment it is difficult to predict whether this assessment will change, emphasising that the Monetary Policy Council has not made any declarations regarding future decisions.

“After all, it cannot be ruled out that commodity prices in the global markets will drop significantly at some point. Or that for some reason - whether as a result of the increasing wave of the disease or as a result of persistent disturbances in supply chains - the economic situation will significantly weaken. And then these probabilities may be completely different. In short, please do not view the assessment of these probabilities as a declaration of our future decisions. The Council does not make such declarations,” the head of the Polish National Bank (NBP) stressed.

Mr Glapiński also emphasised that the NBP is not withdrawing from the bond market. He pointed out that with the current external price shocks, a strengthening of the Polish currency would only have a limited impact on domestic inflation.

The central path of the November NBP projections assumes that CPI inflation in 2021 will reach 4.9 percent, 5.8 percent in 2022 and 3.6 percent in 2023. It also predicts that the dynamic of Poland’s GDP in 2021 will reach 5.3 percent and 4.9 percent in 2022 and 2023.

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