Deputy Governor Kightley Says MPC Could Cut Rates This Year If Demand Pressure Is Not Too Strong

NBP Deputy Governor Marta Kightley told PAP newswire that the Monetary Policy Council (MPC) could cut interest rates by the end of this year if demand pressure is weaker than expected and inflation is under control.

• "Currently inflation expectations look very good, but there is uncertainty around their evolution in case of strong increases in the prices of electricity and energy if anti-inflation measures are lifted, around how firms and households will react to that."
• The official stressed that the latest projection shows that Poland will reach its inflation target in 2026 regardless of what happens to the anti-inflation measures, assuming that interest rates remain unchanged.
• Her comments suggest that the NBP is more concerned about the possible transmission of the expiry of anti-inflation measures (which is by itself a one-off factor) into more sustainable price pressures via elevated inflation expectations.
• Note that Marta Kightley does not sit on the Monetary Policy Council but is a member of the NBP's Management Board and First Deputy Governor. She would automatically replace Governor Adam Glapinski if he was suspended or left his post.