Poland Monetary Policy September 2018


Poland: NBP stays put in September

September 5, 2018

As widely expected by market analysts, the National Bank of Poland (NBP) kept the reference rate unchanged at a record-low 1.50% at its 4–5 September monetary policy meeting. In addition, policymakers held the Lombard rate unchanged at 2.50%, the deposit rate at 0.50% and the rediscount rate at 1.75%. It has been more than three years since the NBP last moved the reference rate.

Inflation remains “moderate” in officials’ eyes, although it was slower economic growth through the remainder of the year that most supported their decision to stay put in September. Lifted by strong household spending through the first half of the year, third-quarter metrics have thus far been upbeat on the continued resilience of the labor market but point to a tapering of this year’s growth spurt. Meanwhile, given the economy’s limited ties to the ongoing emerging-market crises in Turkey and Argentina, little was made about spillover risks in the months to come.

Barring any unforeseen circumstances, policymakers are likely to stay put over the coming quarters as their projections for moderating growth materialize and inflation slowly inches up toward the midpoint of the Bank’s target of 2.5% plus or minus 1.0 percentage point. Dovishness persists among the Monetary Policy Council (MPC), however, and NBP chief Adam Glapinski’s recent guidance that rates should be kept on hold through 2020 remains analysts’ best guess for the eventual onset of monetary tightening. Most FocusEconomics Consensus Forecast panelists also agree that officials are unlikely to interrupt a comeback by fixed investment over the short-term, and a majority see the Bank holding fire on interest rates through much of next year.

Commenting on September’s announcement, Jakub Rybacki, an economist at ING, noted:

“As expected, rates remained unchanged, but the recent problems of emerging markets should have limited impact on the Central Bank's monetary policy. We expect the MPC to maintain flat rates till the end of 2020.”

The next monetary policy meeting is scheduled for 2–3 October.

Against this backdrop, FocusEconomics Consensus Forecast panelists expect the reference rate to end 2018 at 1.50%. For 2019, the panel sees the rate ending the year at 1.68%.


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Poland Monetary Policy Chart

Poland Monetary Policy September 2018

Note: NBP Reference Rate in %.
Source: National Bank of Poland (NBP).

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