The MPC reduced interest rates. Glapiński cools optimism

The NBP reduces interest rates by 25 percentage points, Glapiński emphasizes that this is not the beginning of the reduction cycle and the decisions will depend on the incoming data.

– The decreasing inflation is proof that the NBP monetary policy was competent despite the critic that spilled on us – said Adam Glapiński, president of the National Bank of Poland (NBP) during today’s press conference.

We would like to remind you that after a two -day meeting, on July 2, the Monetary Policy Council (RPP) decided to reduce NBP interest rates by 25 percentage points. This means that the main reference rate is 5.00 percent. on an annual basis.

President Glapiński comments on the decision of the MPC

The day after the announcement of the MPP announcement, on Thursday, July 3, a press conference was held, during which the president of the National Bank of Poland commented on the council’s decision.

– I will start with the most important inflation for us. In June, CPI was 4.1, which is almost as much as in May. When it comes to base inflation, after turning off food and energy prices – in May it reached 3.3 percent. This is the lowest level from Pandemia, i.e. from January 2020 – said Adam Glapiński.

He emphasized that current data indicate that inflation is lowering from quarter to quarter and from July it will be consent with the NBP target level – 2.5 percent. He explained that, in mind, the council decided to “carefully adjust interest rates”. The head of the NBP also pointed out that the Monetary Policy Council provides for further slowing down price pressure in the following months.

– The decrease in inflation shows that monetary policy has not allowed increased price dynamics to consolidate, which in previous quarters increased as a result of regulatory decisions. We stopped it – said Glapiński.

Glapiński: “This is not the beginning of a cycle of reductions”

Interest rates will probably continue to decrease if there is no inflation jump – emphasized the President of the NBP during the conference. At the same time, he noted that the July reduction is not a forecast.

– Further council decisions will depend on the information coming in. We do not announce any path of interest rates. This is not the beginning of the interest rate reduction cycle. We don’t announce anything like that. We will make decisions according to the incoming data, as we made yesterday – emphasized Glapiński.

He stipulated that the Monetary Policy Council does not want to make any declarations as to future decisions.

– Luckily, there is now such an economic cycle and a cycle in inflationary processes that interest rates decrease and will probably decrease if there is no jump in inflation for some reasons that are difficult to predict. At the moment I do not see such reasons, but you never know – said Glapiński.