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Monetary policy in Poland should stay restrictive, say MPC members

Published 03/29/2023, 02:40 AM
Updated 03/29/2023, 02:45 AM
© Reuters. FILE PHOTO: A logo of the Polish Central Bank (NBP) is seen on their building in Warsaw, Poland, September 8, 2022. REUTERS/Kacper Pempel

WARSAW (Reuters) - Polish central banker Joanna Tyrowicz said monetary policy should remain restrictive until net inflation and wages converge to levels consistent with the inflation target.

"As long as net inflation and wages start to approach levels compatible with the inflation target, one cannot say that the central bank has done its job," Tyrowicz told the PAP news agency.

"Elementary responsibility calls for conducting restrictive monetary policy under such conditions."

Ludwik Kotecki, another member of the Monetary Policy Council (MPC) perceived as a supporter of restrictive monetary policy, said a rate hike would be a signal that the Council was still worried about price increases.

"Even a small increase (in interest rates) would confirm that the cycle of monetary policy tightening has not ended," Kotecki said in an interview published on Wednesday in the newspaper Dziennik Gazeta Prawna.

"That we are still concerned that the price increase is too high and the expected fall in inflation is too slow," he added.

Kotecki expects inflation in March to be 15% to 16% versus 18.4% in February.

© Reuters. FILE PHOTO: A logo of the Polish Central Bank (NBP) is seen on their building in Warsaw, Poland, September 8, 2022. REUTERS/Kacper Pempel

Although the National Bank of Poland (NBP) has not officially closed the tightening cycle it began in 2021, Governor Adam Glapinski has said further hikes were unlikely and markets have focussed on when rates could come down.

Poland's MPC holds its next rate-setting meeting on April 4 and 5. The main rate has been at 6.75% since September.

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