Central Bank Hawk Deems 2023 Hikes Unlikely, Calls Rate-Cut Talk "Communication Error"

NBP's Ludwik Kotecki told Reuters that double-digit inflation in Poland leaves no room for rate cuts this year, but interest rates are unlikely to rise further.

• "I believe that the MPC will not raise interest rates this year, but at the same time I do not see room to lower them in 2023."
• "The MPC has de facto ended the hike cycle, although formally it is in a phase of monetary policy rightening."
• "Talking about rate cuts at the moment is, in my opinion, a communication error" that weakens the impact of monetary policy.
• The official thinks that retail price growth may exceed the central bank's tolerance band next year and "the base scenario will still be around +10% Y/Y."
• Kotecki belongs to the hawkish wing of the rate-setting panel and had previously voted for raising interest rates further to prevent inflation from stabilising at elevated levels, even as majority of his colleagues backed a wait-and-see approach.