Polish rate cuts possible in Q2 2025, governor says
Writes through with details
By Karol Badohal and Anna Koper
WARSAW, Oct 3 (Reuters) -Poland may cut rates after the publication of central bank economic forecasts in March, possibly in the second quarter, the governor of the central bank said on Thursday.
The National Bank of Poland (NBP) opted to keep its main interest rate on hold at 5.75% on Wednesday.
It has been at that level for a year amid uncertainty over the outlook for inflation caused in part by energy prices. Markets are focused on when the NBP could join other central banks in starting an easing cycle.
"The fact that the Fed is lowering or the ECB is lowering does not automatically affect our decisions... it only means that there is such a tendency," Adam Glapinski told a news conference.
"At the moment it seems... that we will be cutting (rates) after March next year, so in the second quarter of next year," he told a news conference.
Inflation in Poland has risen in recent months, reaching 4.9% in September, according to a flash estimate, after having been in the central bank's target range of 1.5 to 3.5% earlier in the year.
Glapinski said on Thursday that inflation is likely to be between 4.5% and 5.0% at the end of 2024. He reiterated that it will remain elevated in the first half of 2025 before starting to fall in the second half.
"Only in 2026, when the effects of the energy price increase fade away... inflation is to return to the level consistent with the NBP inflation target," he said.
He said that there was uncertainty abound the inflation outlook, due to question marks over fiscal policy and future government measures to keep household energy bills down.
Glapinski also said that the bank had increased its gold reserves to 420 tonnes and was continuing to work towards having 20% of its reserves in gold.
Reporting by Karol Badohal, Anna Koper, Alan Charlish, Pawel Florkiewicz and Anna Wlodarczak-Semczuk; Editing by Sharon Singleton
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