Governor Glapinski Appears To Hint At Interest-Rate Pause At Least Until March

NBP Governor Adam Glapinski begins his press conference by discussing the economic situation, noting that incoming data has not fundamentally changed the Monetary Policy Council's assessment of the economic situation. He cites the tradition of keeping rates stable at the final meeting of the year, which takes place ahead of the festive season, noting that the on-hold decision was widely expected.

• The Governor says that the central bank is "very happy with" the continued decline in inflation, which is "extremely fast" and "consistent with the NBP's projections". He adds that the fall in headline inflation is now slower than in the previous months, which is also consistent with the NBP's projections. The central bank expects inflation to keep falling in the coming months, albeit at a slower pace than before.
• Governor Adam Glapinski now lists the reasons behind the NBP's expectation that inflation will keep easing: (1) economic activity remains sluggish and the output gap remains negative; (2) the NBP tightened policy earlier, sapping credit flow, which has not yet fully recovered.
• Forward guidance points to little potential for interest-rate action until March. The Governor says that there are many factors raising uncertainty - especially around the fiscal and regulatory policies of the incoming government - which makes it necessary to pause adjustments to monetary policy parametres. He hopes that there will be more clarity in March, when the NBP will publish its new macroeconomic projection - further decisions may be possible from then onwards.