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September 19, 2021
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At the end of 2020, the President of the National Bank of Poland, Adam Glapiński, stated that the Polish central bank was considering further interest rate cuts. One of the members of the Monetary Policy Council (MPC) claims that such a decision does not make sense.

Further cuts

There is no justification for further rate cut – said in an interview for Interia MPC member Eugeniusz Gatnar.

In turn, on Tuesday, Glapiński said that although the current level of interest rates is appropriate, the NBP is analyzing an alternative scenario in which rates will be additionally lowered.

In the first quarter of 2021, it is possible to further reduce interest rates, we at NBP conduct appropriate analyzes of the possible circumstances and potential effects of such a reduction – reported the NBP president in an interview with “Observer Finansowy”.

Let us recall that at the meetings between March 17 and May 28, 2020, the Monetary Policy Council has already cut the reference rate three times, by a total of 140 bps, in steps of 50, 50 and 40 bps, to 0.10 percent.

Earlier, a similar vision of further cutting was suggested by Prof. Eryk Łon, also a member of the MPC. In an article he wrote for Radio Maryja, he stated:

“However, there can of course be situations where it would be necessary to further ease the monetary policy, including reducing the level of interest rates. I do not rule out that in the event of a significant threat of a strong decline in consumer sentiment it would be possible for me to submit a request to lower the interest rates of our central bank. “

It does not make sense!

I have no data to justify such a step. In my opinion, the Polish economy is coping very well in this difficult crisis resulting from the pandemic. When you look at the data on industrial production, the current account surplus, or exports – I do not see any economic reasons for this type of decision. Besides, it does not require a large size. The difference between 0.1% and 0 percent is contractual; however, may adversely affect the stability of the financial sector – now Gatnar said.

The situation in the MPC apparently indicates that cuts will not threaten us either.

The dovish wing of the council, as journalists call it, was in favor of stabilization. Therefore, surprised by such a sudden change in rhetoric – added.

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