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Poland Monetary Policy February 2024

Poland: Central Bank stands pat again in February

At its 6–7 February meeting, the National Bank of Poland (NBP) kept its key reference rate at 5.75%, as had been widely expected by markets. The NBP also left all of its other rates unchanged, with the Lombard rate remaining at 6.25%, the discount rate at 5.85%, the rediscount rate at 5.80% and the deposit rate at 5.25%.

The NBP decided to stand pat amid softening price pressures and recovering, albeit still underwhelming, economic activity. Additionally, labor market conditions remain tight. In December, inflation eased to 6.2% (November: 6.6%)—the lowest rate since September 2021. Moreover, during the same month, producer prices fell in year-on-year terms for the sixth month running. The Bank expects inflation to fall sharply in the first quarter of this year amid moderate economic activity, an appreciating zloty and the lagged effects of previous rate hikes.

In its communiqué, the NBP reiterated its commitment to base upcoming decisions on inflation and economic activity data while remaining ready to “take all necessary actions in order to ensure macroeconomic and financial stability,” including intervention in the foreign exchange market. Our panelists expect the NBP to cut interest rates this year amid receding inflation.

The next monetary policy decision will be taken on 5–6 March.

Commenting on the future path of monetary policy, ING’s Rafal Benecki stated:

“The Council will probably wait for the March macroeconomic projection before future decisions. In March, we will also know the preliminary estimate of CPI inflation for January, and we should learn about the Climate Ministry’s plans to ‘unfreeze’ energy prices for households.”

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