MPC's Tyrowicz Says Central Bank's Monetary Policy Is "Super-Loose"

MPC's Joanna Tyrowicz yesterday told Interia that the monetary policy of Poland's central bank is "insufficiently restrictive" and "super-loose" as real interest rates are negative, while WIBOR is edging lower even with unchanged monetary policy settings.

• Tyrowicz was unable to provide the reasons for the postponement of the next monetary policy meeting, which has been pushed back by one week. She said that calling MPC meetings is an exclusive prerogative of the Governor and criticised staff for waiting 10 days with announcing the change of schedule.
• Asked if she will back a motion to raise interest rates by 100bp in September, Tyrowicz replied that "there are no reasons to believe that the price-setting processes in Poland have stabilised." She attributed the recent slowdown in CPI inflation to base effects and said that the prospect of reaching the inflation target is becoming more distant with each consecutive NBP projection.
• Tyrowicz said that CPI readings do not give a full picture of underlying price-setting processes. She cited studies suggesting that the frequency of price changes in Poland has increased alongside the magnitude of these changes. She added that this transformation in price-setting behaviour were visible in 2019, long before the COVID-19 pandemic or Russia's invasion of Ukraine.
• Commenting on the "hawkish" label attached to her by reporters, she said that "there is no space for ornitology with inflation four times higher than the target level." She has consistently called for a forceful increase in interest rates on the assessment that their current level does not guarantee a return to the inflation target.