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MPC member on interest rates: I am convinced there will be another cut
– I believe there will be another reduction in interest rates – stated Przemysław Litwiniuk, a member of the Monetary Policy Council, during the „Fakty po Faktach” segment on TVN24. He suggested that the reference rate might decrease to 4.5 percent this year.
– In my view, the answer is affirmative: yes, there will be – Litwiniuk mentioned on TVN24, when queried about the possibility of another interest rate reduction. When asked about the timing for the Monetary Policy Council to potentially reach such a decision, he noted that „it is a more intricate matter”.
A moment for a „significant move towards rate reduction”
He remarked that if the situation regarding the currently frozen electricity prices for households is resolved and there are no external factors that would hinder the inflation forecast, „then this autumn could present a good opportunity for a significant move towards reducing interest rates”.
When inquired about what „significant” meant, the MPC member indicated it would be „at least” comparable to the last decision (which involved a cut of 50 basis points – ed.).
– The total adjustment of interest rates in 2025 could reach 125 basis points – predicts Przemysław Litwiniuk.
During the discussion on TVN24, he also mentioned that „there are indications that perhaps July will be such a moment (for rate reductions – ed.)” due to the central bank releasing a new inflation forecast. – I believe that adjustments should be made under conditions of greater clarity – added the MPC member.
„The narratives of Mr. President Glapiński”
Przemysław Litwiniuk was also questioned about the remarks made by the President of the National Bank of Poland, Adam Glapiński, concerning developers lobbying for lower interest rates. He remarked that these were „merely stories from Mr. President Glapiński”.
– I perceive it as an interpretation of phenomena that were occurring somewhere in the public domain. Various kinds of speeches, whether from politicians or others commenting on the economy. And this is how President Glapiński, a professor, has interpreted it – stated the TVN24 guest.
– I do not entirely concur with this interpretation; I do not feel pressured by anyone. Neither by governmental elements nor by stakeholders in the economic sphere. I believe everyone recognizes that an economy characterized by low inflation is safer, fostering stable development and avoiding the emergence of inequalities that are detrimental in the long term – Litwiniuk emphasized.
Przemysław Litwiniuk in „Fakty po Faktach” TVN24The council takes decisive action
The Monetary Policy Council (MPC) during its meeting that concluded on Wednesday reduced the NBP interest rates by 50 basis points. The reference rate decreased from 5.75% to 5.25%.
The prior interest rate level had been maintained since October 2023.
„Considering the incoming data, including lower current and projected inflation, diminishing wage growth, and weaker economic data, the Council deemed it justified to modify the NBP interest rate levels,” the Monetary Policy Council stated in a release following the May meeting.
The President of the National Bank of Poland responds
During his speech on Thursday, NBP President Adam Glapiński expressed skepticism about the Monetary Policy Council lowering interest rates in June. He mentioned that the majority stance of the MPC suggests that autumn is pivotal for interest rates.
Glapiński also indicated that adjusting interest rates does not signify the commencement of a cycle and that nothing is definitive. He assessed that the comments from MPC members imply that should the Council opt for further rate reductions, whether in July or in the autumn, the majority would support the cycle.
The NBP President noted that MPC members were experiencing pressure from developers and borrowers to decrease interest rates. However, he emphasized that this pressure primarily stemmed from developers anticipating the initiation of a government program to assist borrowers, which ultimately did not materialize.
Interest rates in Poland and Europe PAP/Michał Czernek
