Poland’s central bank governor stated on Thursday that the recent interest rate reduction does not signal the beginning of a new easing cycle. The bank reduced its key rate by 25 basis points to 5% on Wednesday because of projected inflation decreases but maintained flexibility for future rate adjustments based on upcoming data.
Governor Adam Glapinski stated that the monetary authority did not establish any specific interest rate trajectory. The central bank governor stated that the rate cut did not initiate a new cycle yet he acknowledged the possibility of another rate reduction in September.
The inflation data released recently indicated consumer prices increased 4.1% in June which exceeded market expectations and the central bank’s target range of 1.5%-3.5%. The new forecasts published on Wednesday indicate that inflation will reach the target range possibly during this month.
The central bank modified its monetary policy after observing decreasing economic growth together with weakening inflationary forces while maintaining a conservative approach to monetary policy relaxation.
