WARSAW (Reuters) -Two Polish central bankers were quoted on Wednesday as saying there could be an interest cut in May, in the latest signs of an increasingly dovish stance from the Monetary Policy Council.
Poland’s main interest rate has been at 5.75% since October 2023, but with the outlook for inflation lower than previously thought a growing number of policymakers have been signalling that the cost of credit may soon fall.
In an interview published on Wednesday, MPC member Gabriela Maslowska told Bloomberg News that there could be a 25-basis-point rate cut in May, depending on inflation data for April.
“It can’t be ruled out that interest rates will be cut in May,” she was quoted as saying. “The CPI reading for April and especially the July projection will be crucial for the decision to cut interest rates in the coming months.”
Meanwhile, central banker Ludwik Kotecki was quoted as saying by state news agency PAP that the latest economic data in Poland supported a rate cut in May.
“May is the moment when the Council should, in my opinion, make a decision, the first one, after a dozen or so months – because the last cut was in October 2023, and inflation has changed by over 50% since then,” the MPC member said.
“Considering that the indicators for February and March are not the best, and wage dynamics have been falling for another month, I see no arguments against lowering interest rates today.”
Wage growth in Poland slowed for a fourth month in a row in March and industrial output was lower than expected in data published on Tuesday, which analysts said could boost the case for cutting interest rates as soon as May.
Data published on Wednesday showed that retail sales also fell in March for the second month in a row, in what economists said was another argument for a quick start to monetary policy easing.
Kotecki repeated that in his opinion interest rates could be cut by 100 basis points in 2025.
(Reporting by Alan Charlish, Pawel FlorkiewiczEditing by Peter Graff and Alison Williams)
