Governor Sees Rates Unchanged In 2024, Says Rate-Cut Debate May Start In 1Q2025

The Governor reiterates that he doesn't see readiness within the MPC to lower interest rates by the end of this year, but first discussions on rate cuts may emerge in 1Q2025, even as there may be some disagreements between Council members in the early phase of the debate.

• Monetary easing will be possible if the MPC sees a sustainable stabilisation of CPI within the target range - or when the inflation projection provided by the central bank's staff shows that it is about to happen imminently e.g. within two months. The Governor 's personal view is that conditions may be ripe for a rate-cut debate in early 2025, albeit it is not obvious that members would immediately agree to reduce rates.
• On a different note, the Governor flags a sense of concern about geopolitical risk stemming from the ongoing war in Ukraine. He says that Poland is not currently at risk of being invaded by any foreign army, but the prospect of "Ukraine losing its independence or worse" and/or Russian troops advancing towards the Dnieper river and making territorial gains the south of Ukraine are important geopolitical risks. He suggests that this is a key reason behind increased gold purchases by the NBP.