Member of the Monetary Policy Council (MPC) Eryk Łon in his new article came about interest rates. in our country. In his opinion, their stabilization at the current level would be a good strategy. Although he has been calling for a reduction in interest rates for a long time, he now emphasizes that tightening monetary policy in the second half of 2020 or in 2021 would be too risky.
Eryk Łon advises what to do with interest rates
“I am convinced that stabilizing the level of interest rates at the current very low level would be a good strategy in Polish monetary policy. This would strengthen the belief among economic participants that our central bank is trying to do everything possible so as not to harm the wave of economic recovery that we are currently dealing with. For this reason, I think that tightening monetary policy in the second half of this year or even next year would be too risky. “
– Łon wrote in an article for Radio Maryja.
Lon thinks he is “Extremely important” to keep the cost of public debt as low as possible. – I am convinced that the easing of Polish monetary policy, which we faced this year, will contribute to the fact that the profitability of Polish Treasury bonds will be at the lowest possible level – added.
Interest rates in Poland
Let us remind, however, that between mid-March and the end of May, the Monetary Policy Council lowered the reference interest rate by a total of 140 bp, in three steps, by 50, 50 and 40 bp, to 0.10%. In June, it kept interest rates unchanged.
Today, Łon notices clear anti-inflationary tendencies with us. These, in his opinion, may be further strengthened after the new matrix on tax on goods and services entered into force. The one has been in force since July 1 and has eliminated many absurdities regarding VAT.
As for unemployment, Łon thinks that it will be “Relatively insignificant”.
It is worth adding that he is one of the most controversial economists in the country. For a long time he was the only MPC member who wanted to implement lower interest rates.