Biznes Fakty
MPC member on interest rates. „Today we have a new world”
Ireneusz Dąbrowski, a member of the Monetary Policy Council, informed reporters that the forthcoming interest rate reductions might not take place until the last quarter of 2025, marking the commencement of a gradual cycle of rate decreases. He mentioned that the Council would consider the possibility of lowering the interest rate on mandatory reserve funds during their June meeting.
– I do not anticipate any cuts at the upcoming meeting in June, and while the topic may be revisited in July, it will likely be more of a discussion rather than a decision – stated Ireneusz Dąbrowski, a member of the Monetary Policy Council, during a scientific conference at the Warsaw School of Economics.
„We are just waiting for the data”
He emphasized that the MPC is primarily awaiting „data regarding energy prices and new tariffs” – these factors carry significant weight. Additionally, the Council is assessing the consequences of interest rate adjustments – specifically, how they will influence expectations. Another consideration is the change in wage pressures – which currently exceed the desired threshold. We are simply awaiting the data – he noted.
– Regarding future decisions, I’m inclined to discuss the fourth quarter, but I wouldn’t want to make any definitive statements at this time. Numerous factors will impact our decisions – Dąbrowski concluded.
– I believe we are on the cusp of initiating the cycle. I trust that we have completed the necessary adjustment and will observe the ultimate effects of this change. (…) The next development will likely be a cycle, although it’s difficult for me to specify when – a cycle understood as a series of small adjustments. I favor any subsequent changes being part of a cycle and occurring in a context of high certainty regarding our return to the inflation target – he added.
„Today we have a new world”
During a press conference in May, NBP President Adam Glapiński stated that remarks from MPC members at the May meeting suggested that if the Council opted to further reduce rates in July or in the autumn, most would support the cycle. He noted that for the central bank, adjustments of 25 basis points (bp) are more manageable compared to those of 50 bp.
Dąbrowski was unable to predict the extent of interest rate changes by the year’s end due to what he perceives as excessive uncertainty.
– I won’t delve into global uncertainties. Currently, we find ourselves in a new world – following a Sino-American agreement last Sunday. These global uncertainties will also play a role. Oil prices are already exceeding $60 per barrel – he added.
Monetary Policy Council meeting in June
Dąbrowski revealed that the Monetary Policy Council will address the possibility of lowering the interest rate on mandatory reserve funds in June, although the outcome of this deliberation remains uncertain.
– I’m unsure of the direction the discussions will take in June – likely leaning towards reducing the interest rate on the reserve requirement, but I truly cannot predict the conclusion. We will focus more on the interest rate rather than the actual level of the reserve requirement,” he added.
The current reserve requirement rate stands at 3.50%, with the interest rate on reserve funds aligned with the reference rate, which is 5.25% following the cut in May. The reserve requirement represents the funds that commercial banks are obligated to keep in an account at the central bank – they are prohibited from investing these funds. The level of reserves influences liquidity within the banking sector and regulates the amount of money available in the market.
Earlier in May, the President of the National Bank of Poland stated that the topic of reserve requirement parameters would be included in the agenda for the June MPC meeting.
