Monetary Policy Adjustments: Poland's Interest Rate Outlook

Poland's central bank is contemplating another interest rate cut as early as September, marking it the final adjustment for the year, according to Henryk Wnorowski of the Monetary Policy Council. The unexpected reduction to 5% in July was driven by expected inflation declines.

Governor Adam Glapinski previously indicated that July's rate cut was not the beginning of a policy-easing trend, though he acknowledged a potential follow-up cut. Wnorowski anticipates interest rates with a 'four at the front' by year's end, necessitating a 25-basis-point cut, possibly as soon as September.

Inflation uncertainties persist due to internal factors like the pending status of the energy shield. The government's unresolved bill to extend energy price restrictions until late 2025 adds to fiscal policy concerns. Wnorowski urged caution for future monetary strategies, signaling more rate cuts if inflation trends stabilize.

(With inputs from agencies.)