MNI NBP Review - Feb 2025: No Reason To Cut Rates
Executive Summary:
- The MPC left the reference rate unchanged at 5.75%.
- The statement largely repeated previous messaging.
- The presser sounded less hawkish at the margin.
Click here to see the full review:MNI NBP Review - February 2025.pdf
The Monetary Policy Council (MPC) kept the reference rate unchanged at 5.75% for the 16th consecutive meeting in a widely expected and well-telegraphed decision. The accompanying statement was almost a carbon copy of the document from three weeks ago. During his press conference, Governor Adam Glapiński reiterated that although MPC members are looking forward to lowering monetary policy, the moment when it becomes possible is still some way off. The Governor noted that the Council cannot allow elevated inflation to become entrenched, while the risk of this scenario is underpinned by the ongoing economic recovery, robust wage pressure and loose fiscal policy. According to the Governor, the current inflation outlook gives no reason to cut rates in the foreseeable future. On the other hand, he also mentioned several downside risks to the inflation outlook, suggesting that their materialisation could potentially bring rate cuts forward.