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MNI JAPAN NOV JOBLESS RATE AT 2.5%, UNCHANGED FROM OCT

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NBP: MPC's Tyrowicz Sees No Room For Cutting Rates In Current Situation

NBP
PolandCEEMEAEM BulletBulletEmerging Market News

MPC's Joanna Tyrowicz participated in a debate with chief economists of Santander, Credit Agricole and PKO hosted by Money.pl, using this opportunity to reaffirm her view that the current environment is not appropriate for lowering interest rates.

  • "Our central bank has not yet published any projection, which wouldn't show inflation returning to the target towards the end of the [forecast] horizon. For the past few years, we're about to be back to the target within two years, but this is not materialising. In my opinion, these are not the proper conditions for lowering interest rates. We've gone too far with insufficiently restrictive monetary policy."
  • Tyrowicz clarified that if (1) real wage growth approaches long-term averages, which translates into a decline in services inflation to "decent" levels, (2) fiscal policy is not pro-inflationary, and (3) there are no negative surprises in the zloty exchange rate, then she could agree to support a normalisation (i.e. loosening) of monetary policy.
  • Commenting on forecasts endorsed by other panellists, which suggested that these conditions could be met in 2H2025, Tyrowicz said that they are based on a confluence of several factors, which are unlikely to all occur in 2025. She said that a prudent central bank should focus on bringing inflation to the target.
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MPC's Joanna Tyrowicz participated in a debate with chief economists of Santander, Credit Agricole and PKO hosted by Money.pl, using this opportunity to reaffirm her view that the current environment is not appropriate for lowering interest rates.

  • "Our central bank has not yet published any projection, which wouldn't show inflation returning to the target towards the end of the [forecast] horizon. For the past few years, we're about to be back to the target within two years, but this is not materialising. In my opinion, these are not the proper conditions for lowering interest rates. We've gone too far with insufficiently restrictive monetary policy."
  • Tyrowicz clarified that if (1) real wage growth approaches long-term averages, which translates into a decline in services inflation to "decent" levels, (2) fiscal policy is not pro-inflationary, and (3) there are no negative surprises in the zloty exchange rate, then she could agree to support a normalisation (i.e. loosening) of monetary policy.
  • Commenting on forecasts endorsed by other panellists, which suggested that these conditions could be met in 2H2025, Tyrowicz said that they are based on a confluence of several factors, which are unlikely to all occur in 2025. She said that a prudent central bank should focus on bringing inflation to the target.