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October 4, 2022
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At the end of the year, we learned the statement of Adam Glapiński, the president of the NBP, in which he admitted that the Monetary Policy Council (MPC) may continue to cut interest rates. in Poland. Now the Financial Observer published the rest of the interview with the head of our country’s central bank.

It all depends on the pandemic

If the pandemic and the economic situation develop in line with the baseline scenario, i.e. the epidemic situation stabilizes and the economic situation gradually improves, there should be no need to change the parameters of monetary policy in the coming quarters. However, if there were any factors adversely affecting the Polish economic situation, risking inflation falling below the target, it cannot be ruled out that a stronger reaction on the side of monetary policy would be necessary. For example, in the event of the third wave of the pandemic in the winter months, it would be possible to further reduce interest rates in the first quarter of 2021. – said Glapiński.

Everything will be decided in March

I believe that on the occasion of the March projection of inflation and GDP, we will know more about the epidemic situation and the outlook for the economy, which will also enable a better assessment of further actions in monetary policy – added. So we already know that the MPC will make the final decision in March.

The epidemic situation is not everything. The MPC may also consciously weaken the zloty.

Increasing recently the pressure to increase the value of the zloty is very worrying and very harmful. It is harmful in terms of rebounding our GDP growth and maintaining export dynamics. In the situation of our projection of inflation for next year at a low level, this obviously creates space for possible decisive interventions by the central bank – said the president. – In view of our low inflation projection in 2021, This, of course, creates space for possible decisive interventions by the central bank. Therefore, from mid-December 2020, the NBP Management Board purchases foreign currencies on the currency market in order to strengthen the impact of loosening the NBP monetary policy on the economy – added.

He also continued to defend the policy of the authorities.

I have no doubt that our response was appropriate. (…) Our experts estimate that in these two years the GDP will be higher by 1.4 percentage points thanks to our actions. It’s a lot. The loosening of monetary policy also contributed to limiting the risk of inflation dropping below the NBP target, which would be very unfavorable for our economy. So there is no doubt that our response to the pandemic was appropriate and immediate – argues.

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