Citi Predicts Polish Central Bank to Cut Interest Rates

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Anticipated Rate Cuts by the National Bank of Poland

According to economists at Citi, the National Bank of Poland (NBP) is expected to reduce interest rates by 50 basis points in their upcoming meeting. This projection aligns with recent comments made by NBP Governor Adam Glapinski, who indicated potential rate reductions in the foreseeable future.

In his address on April 18, Glapinski expressed a more optimistic outlook regarding inflation returning to its target level sooner than previously forecasted. He attributed this optimism to a favorable slowdown in wage growth and a significant decrease in oil prices. These observations are consistent with the dovish stance observed during the NBP’s April press briefing.

Citi’s predictions are reinforced by the latest labor market data, which reveal a persistent decline in wage pressures. Consequently, their analysts anticipate a further deceleration in inflation for April. The possibility of an interest rate cut by the NBP is viewed as a response to these improving economic indicators.

Glapinski’s remarks, combined with Citi’s analysis, suggest that the central bank is prepared to adjust its monetary policy to accommodate the evolving inflation landscape. The expectation of a rate cut stems from a combination of economic factors, including developments in the labor market and commodity prices.

Should the NBP proceed with the rate cut as Citi predicts, it would signify a shift in the bank’s strategic approach. The decision would aim to guide inflation towards the NBP’s target by balancing economic growth and maintaining price stability.

The Monetary Policy Committee’s meeting next week will be crucial in determining whether Citi’s forecast aligns with the central bank’s policy decisions.