MNI NBP Review - December 2022: Rate-Hike Cycle Remains On Pause

Executive Summary:

• The NBP left interest rates unchanged and provided no surprises in the statement, matching expectations of sell-side analysts and the market.
• During the press conference, Governor Glapinski said that interest rates are at an “optimal” level, whereby inflation is expected to slow while Poland should avoid a recession.
• Glapinski refused to formally declare the end of the tightening cycle, noting that the Committee did not discuss it this week.

Full review including summary of sell-side analyst views here:

MNI NBP Review - December 22.pdf

The National Bank of Poland maintained its policy rate unchanged at 6.75% and stuck to its assessment of the economy, meeting expectations of an extended pause in the current rate-hike cycle. The decision came in fairly late by this year’s standards, at 1655 GMT/1755 CET, suggesting another heated discussion between dovish-leaning majority and three hawkish dissenters in the MPC.

The central bank’s decision was just more of the same, with the Committee cruising through the meeting on autopilot, as the majority led by Governor Glapinski retained the upper hand. The language of the statement echoed familiar rhetoric, pointing to emerging headwinds to economic growth and expectations of a slowdown in headline inflation next year. Unsurprisingly, the statement acknowledged a softer-than-expected CPI outturn for November.