Snap5 December 2018Updated 4 weeks ago

Poland: Key takeaways from the MPC conference

Poland's Monetary Policy Committee maintains its dovish stance. Governor Glapinski reiterated his opinion that rates will remain flat next year and that will probably continue into 2020. So we believe we won't see a rate change until 2021 at the earliest

Poland's central bank has left rates unchanged, in line with expectations. Changes to the policy statement were cosmetic – major conclusions regarding inflation were remained the same. The MPC expects CPI to stay close to the bank's target in the forecast period. The Council anticipates a rise in CPI next year, due to energy prices, for example, but the scale should be limited given lower oil and food costs. Estimates of the impact of new electricity tariffs on CPI are due in January.

Adam Glapiński also noted that the global economy is slowing down, adding that the weaker performance of Germany will impact the Polish economy with some lag. The MPC's Grażyna Ancyparowicz stated there's a low probability of an interest rate hike in the fourth quarter of next year if the March projection shows significant inflationary pressures ahead. The Importance of the NBP forecast was highlighted also by Rafal Sura (centrist). Similarly like Glapiński, he reiterated that no rate change is expected next year.

The fallout from the financial supervision scandal was also discussed. The NBP confirmed it sued two press corporations, which linked governor A.Glapinski to a corruption scandal at the financial supervision authority (KNF). Journalists from one of those organisations did not receive accreditation for the news conference. When asked about the condition of the banking sector, Glapinski confirmed it was stable. For further information see our previous article.