Wnorowski Says It's Too Early To Discuss Rate Cuts, Does Not Expect Them Next Year

NBP's Henryk Wnorowski told Interia.pl that he does not expect rate cuts to commence in 2023, even if there can be reasons to initiate discussions about easing monetary policy.

• Wnorowski told the news portal that the central bank's projection "doesn't see a recession in 2023, but a notable slowdown is on the horizon." It is "highly likely" that Poland will see a definite end to inflation accelerations in 1Q2023.
• The official argued that the current level of interest rates is "optimal" and the decisions taken by the Monetary Policy Committee to date were "correct," helping bring inflation to the target at a minimal cost.
• Wnorowski assessed that the November inflation readings warrant continued interest-rate stabilisation, with the central bank now in a "wait and see" mode. De-anchored inflation expectations have been the main reason for a delay in the moderation in actual price pressures.
• The central bank is not calling an end to the tightening cycle as the Fed and the ECB remain "strongly hawkish" in their communications, but there is no reason to resume rate hikes at this stage.
• While Wnorowski is not among the dissenting rate-hike proponents within the MPC, his comments contained some overtones that could be deemed hawkish relative to the communications from some of his colleagues from the "rate stability" camp.
• Crucially, Wnorowski said that it is "way too early" to discuss rate cuts now, adding that such a debate would be warranted if we saw three consecutive decreases in monthly inflation readings. He conceded that the debate might resurface next year, but it is unlikely that it would lead to imminent easing.