Poland's MPC member sees favourable conditions for 50 bps rate cut in May, further motions in autumn
There are conditions for a 50 basis points rate cut at the MPC meeting in May, further cuts would be possible in the autumn, by a total of 100-125 basis points throughout 2025, Poland's Monetary Policy Council member Przemyslaw Litwiniuk told reporters. He added that if there was no request for a rate cut at the MPC's May meeting, he would make one himself.
"The conditions outlined by Poland's central bank NBP governor regarding the grounds for changing the parameters of monetary policy and, more specifically, for lowering interest rates, are coming to fruition," Litwiniuk said backstage at the European Economic Congress in Katowice.
"Data flowing from the economy confirms the grounds for serious consideration of a rate cut at the forthcoming May meeting. The issue is the scale of this reduction, whether it is 25 basis points or 50 basis points, and the nature of this cut, whether it will be a cycle or an adjustment," he added.
The MPC member said that he saw grounds supporting the idea of cutting interest rates by 0.05 percentage points at the next meeting in May.
"In my view, there are conditions for adjusting the level of rates in the first half of the year, before the July projection, i.e. at the next meeting, by 50 basis points. It may be worth considering doing so in two steps, in May and in June, but at the moment there is no strong case for such an action," Litwiuniuk said.
"Then, after observing the projections, the path of inflation and GDP, further decisions would have to be taken in the autumn. I do not rule out another 50 basis points [cut] in the autumn. In July, there will be a projection, it will show us the course of inflation with the assumption of unchanged interest rates. That is why I think it is necessary to change the rates before July in order for the projection to be valid," he added.
Asked if he would vote for a 50 basis points rate cut in May, he replied: "If nothing changes by May 7, then if there is no such proposal, I will make it myself."
In Litwiniuk's view, the next rate cuts could come in either September or October, both months being "just as good".
"From the perspective of today, I believe that 100 basis points [throughout 2025 - PAP ed.] is sufficient, but I do not rule out 125 basis points [cut]," he added.
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