The borrower will feel the change of president? An important voice from the MPC

This week, a meeting of the Monetary Policy Council (RPP) took place. This time the body decided to leave interest rates at the current level, which means that the main reference rate is still 5.25 percent. Let us remind you that in May the MPC made the first cuts since October 2023. – In May, the Council adapted interest rates significantly, lowering them by half a percentage point – emphasized the president of the National Bank of Poland (NBP), and at the same time chairman Adam Glapiński during a press conference organized the day after the decision on interest rates.

Glapiński explained that the MPC is waiting for the moment when inflation data would reduce interest rates, but this situation has not yet happened. The head of the Central Bank pointed out, however, that it is expected that inflation will be lower.

There will be no interest rate reduction?

The decision of the MPC on leaving interest rates at the same level was not a surprise to economists. However, many experts predicted that in July the council could return to cuts. Now, however, the situation may change in connection with the presidential elections.

– I agree with the views of economists who provide for a lesser desire to advise you to make cuts after the presidential election – Ludwik Kotecki, a member of the MPC, admitted in an interview with Bloomberg. – With this political instability, which can be expected now, it is difficult to expect significant fiscal consolidation He added.

Kotecki himself believes that interest rates should be reduced during the July or September meeting of the MPC (there will be no decision -making meeting in August). Cutting this year with a total of 50 base points would be “optimal”, according to the MPP member. According to Kotecki, the MPC should no longer wait with cuts, because it can harm the economy.