Interest rate reduction queue still on vacation? A surprising voice from the MPC

A week ago, the Monetary Policy Council (RPP) decided to cut interest rates for the first time in 1.5 years. The reduction was 50 base points, as a result of which the main reference rate is currently 5.25 percent.

Interest rate reductions are good news for borrowers, because thanks to this their installments will be lower. After the MPP decision, speculation immediately started whether it was the beginning of a series of cuts. According to the statements of the MPP members, the reduction during the June meeting is unlikely.

– I do not anticipate discounts at the next meeting in June, the discussion may return in July, but it will also be a discussion rather than a decision. First of all, we are waiting for data on energy prices and new tariffs, (…) They weigh a lot. The second thing is the impact of a change in interest rates – as he will affect expectations. The third thing – how the wage pressure changes – it is slightly above the border we would like. We are simply waiting for data – Ireneusz Dąbrowski, a member of the MPC, said a few days ago.

In his opinion, subsequent discounts may take place in the fourth quarter of this year, although he emphasized that he would not undertake a firm declaration in this matter. – There are a lot of factors that will affect our decisions – noted Dąbrowski.

The interest rate reduction is still on vacation?

In an interview with PAP, another member of the Republic of Poland Cezary Kochalski talks about whether cuts of interest rates are still possible during the holidays. – Will there be space for the cycle in the fourth quarter? I can’t settle this today. The adaptation approach speaks more to me in the face of great uncertainty. It all depends on the receiving data. However, I think that until the end of my term, which passes on December 20 this year, I could imagine space for possible cuts in a size of 50-75 PB. But it also depends on what will happen in July and what will the situation be in autumn – said Kochalski.

– In May, we made a corrective reduction of the foot, so it could be a little deeper than 25 PB. It is difficult for me to imagine today that the next meeting in June will come to the data that could resurrect the discussion on the change of feet, while July, due to the new projection, may be the moment of discussion on any next correction He added.

Kochalski indicates that if in July there were a reduction in interest rates, then “I am not convinced if it was as deep as 50 pb, but I would not be categorically ruled out.”