MPC Member Says Govt's Energy Price Plan Helps Rate Cut Case

Speaking in an interview to Bloomberg, MPC member Henryk Wnorowski said the Polish government’s latest plan to keep a lid on energy prices is set to increase the likelihood of an interest-rate cut this year.

• The uncertainty over energy prices was one of the key factors preventing the central bank from cutting borrowing costs further despite a sharp decline in inflation, he said, but the government said it’s looking to continue capping electricity costs for longer under a draft legislation presented on Tuesday.
• “Now we’re sure the extreme negative option won’t materialize,” Wnorowski said. “We still have to watch the situation for a while” to see if inflation stays low but “nevertheless, I believe that the plan’s assumptions increase the likelihood of potential rate cuts this year.”
• The comments are little surprise from Wnorowski, who's made the case for potential rate cuts this year on a handful of occasions - last week noted that "rate cuts can't be ruled out this year" - but using the power plan as justification seemingly adds to the argument. EUR/PLN did not react to the comments.