Poland’s MPC expected to cut rates by 50 bps on May 7, debate on cycle in background
Poland's Monetary Policy Council is widely expected to lower the main interest rate by 50 basis points to 5.25 percent on May 7; policymakers are to debate whether this will mark the start of a broader easing cycle or a single one-off adjustment.
Market consensus points to a 50 basis point rate cut by the MPC, following signals from Poland's central bank governor Adam Glapinski, who said the Council had shifted to a more dovish stance and could cut rates as soon as May, depending on economic data.
The discussion about the possibility of interest rate cuts accelerated sharply at the beginning of April, when governor Glapinski unexpectedly announced at a press conference that the MPC had taken a turn towards a less restrictive monetary policy.
"One could jokingly say I come as a dove leading other doves. The Council is shifting to a more dovish stance, expecting the situation to move toward rate cuts," Glapinski said.
He indicated that after the initial cut, there might be a pause before any further reductions.
Poland's MPC member Przemyslaw Litwiniuk stated that he would submit a motion for a 50 basis point cut in May if no one else did, while Henryk Wnorowski suggested that the key was for a cut to occur at all, favouring a standard 25 basis point move.
According to the Council's discussions, the main question is whether to begin a full easing cycle or opt for a one-off adjustment.
Recent macroeconomic data, including slower wage growth and lower industrial output, have reinforced expectations for a rate cut.
Some Council members believe that a total reduction of 100 basis points is possible in 2025, but the scope for further cuts may be limited by persistent inflation and loose fiscal policy.
tus/ nl/ ao/