By Anna Koper
WARSAW (Reuters) -The National Bank of Poland (NBP) left its main interest rate unchanged at 6.75% on Wednesday, it said, as it bets that a slowdown in the global economy will help bring inflation under control.
Faced with surging consumer prices on one hand and slowing growth on the other, central European policymakers have been trying to stop raising rates to avoid stifling economies that have been hit hard by the war in Ukraine.
“The Council assessed, that the expected weakening of the external economic conditions, together with monetary policy tightening by major central banks, will curb global inflation and commodity prices,” the central bank said in a statement.
“Under such circumstances, the hitherto significant monetary policy tightening by NBP will support a decline in inflation in Poland towards the NBP inflation target.”
The argument for stable rates in Poland was boosted by statistics office data showing a decrease in inflation to 17.4% in November from 17.9% the previous month, as well as third-quarter gross domestic product (GDP) data that pointed to a slowdown in private consumption.
“Since there was no decision to raise rates in the two previous months… the chances for a hike were all the more unlikely now that positive signals in domestic and international data have emerged concerning the inflation outlook,” said Piotr Bielski, director of the economic analysis department of Santander Bank Polska.
All 20 analysts in a Reuters poll had expected the main rate to stay on hold. While central bank governor Adam Glapinski has said that the cycle is paused and not necessarily ended, most economists now expect rates to stay on hold until the end of 2023.
Bielski said that markets would now be looking for signs that “the door to further rate hikes is closing” and also for signals that there could be rate cuts before the end of 2023.
In November the Czech National Bank (CNB) kept its key interest rate stable for a third straight meeting. The National Bank of Hungary (NBH) also left its base rate unchanged and pledged to maintain tight monetary conditions for a “prolonged period”.
(Reporting by Alan Charlish, Anna Koper, Pawel Florkiewicz, Anna Wlodarczak-Semczuk; Editing by Toby Chopra, William Maclean)
