Lowest Spreads and Flexible Terms.
An RPP member sees no need for interest rate hikes
The MPC sees no need for rate hikes. Dąbrowski: a cut is even less likely
With the current data, the Monetary Policy Council does not see a need to raise interest rates, said MPC member Ireneusz Dąbrowski on Radio Zet. He added that, in his view, a rate cut is even less likely than a hike. That is an important signal for people repaying loans and for those watching the zloty exchange rate, because expectations about monetary policy affect the currency market.
Dąbrowski said that with the current set of data he sees no need to tighten monetary policy, at least for now. He also stressed that he does not expect any quick easing. In practice, this means the MPC is waiting for more data before deciding whether to move rates in either direction.
The MPC member pointed to significant uncertainty linked to the U.S. midterm elections, scheduled for 3 November. In his view, forecasts are very hard to make today. He also pointed to the possible effects of President Trump’s actions toward Iran after the elections. In his opinion, the standoff between Iran, the United States and Israel may only now be entering a crucial phase.
Dąbrowski also addressed the government’s fuel-price-cutting program, the so-called “CPN”. In his view, the program should be continued, and current regulations provide financial backing for it until the end of 2026. According to him, high fuel prices and further fiscal burdens could complicate the economic situation, and if needed the MPC will have to respond.
Dąbrowski also said the government is at the limit in terms of fiscal policy. He cautioned that monetary policy has to be aligned with fiscal policy, but if the current policy continues, Poland could run into serious problems. For markets, it is a reminder that rate decisions are not made in a vacuum, but against a backdrop of budget policy and external tensions.
Sources
