(Bloomberg) — Poland will probably increase its main interest rate by 50 basis points in January, a fourth consecutive monthly increase, said Lukasz Hardt, a member of the Monetary Policy Council.
In an interview with RMF FM radio on Saturday, Hardt said Poland will probably need to raise rates further to fight high inflation. The nation’s CPI may peak in December at slightly above 8%, he told the broadcaster, adding that he doesn’t expect the gauge to reach double digits.
Temporary cuts to energy taxes introduced by the government will help slow down inflation by 1 to 1.5 percentage points in the early months of 2022, Hardt said.
Polish inflation hit a two-decade high of 7.7% in November, more than three times the central bank’s medium-term goal of 2.5%. The scale of future tightening will depend on upcoming inflation and economic growth data, including the situation in the labor market, the central bank said on Wednesday after raising the main rate by 50 basis points.
Poland Hikes Rates Above Pre-Covid Levels and Signals More
Central Bank Governor Adam Glapinski, who resisted calls for much of the year to follow the nearby Czech Republic and Hungary in tightening monetary policy, began lifting rates in October as inflation became a hot-button political issue. The main rate has risen to 1.75% from 0.1% since then.
Inflation should start to slow in the coming quarters and return to the central bank’s target at the end of 2023, Hardt said on Saturday. He said the council had been late to start raising rates, and called for better communication from the central bank to help strengthen the zloty.
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