The Polish loan repayments may increase soon. ukasz Hardt, a member of the Monetary Policy Council, acknowledges that “all conditions have been met” for an interest rate hike. Sam will vote for this option.
– All conditions for the prudent normalization of monetary policy have already been met. The optimal monetary policy strategy in Poland at the moment is to raise the reference rate by 15 basis points – said ukasz Hardt, a member of the Monetary Policy Council (MPC), in an interview with ISBnews.
He noted that the risk of delaying the reaction may have negative effects in the future.
– The longer the council does not react, the higher the risk. Also the risk of an increased monetary policy reaction in the future. He explained that an earlier and milder reaction is a better situation.
In response to a question whether it is possible to slow down the pace of asset purchases while raising interest rates at the same time, he replied that “the Monetary Policy Committee has complete freedom to choose the timing of raising the reference rate.”
See also: Batkovsky: High inflation where there is rapid economic growth
He assessed that it is also possible to manage excess liquidity in the banking sector in a different way.
– I would like to point out that The Federal Reserve (the Federal Reserve System, which performs the functions of the central bank of the United States) has not increased the reference rate for some time, has not yet limited asset purchases, but has begun to manage liquidity very actively, uses “reverse repo” (a financial transaction involving the purchase of a security and the simultaneous obligation to sell it at a specified date in the future) on a larger scale and an interest rate increase on excess reserves in June. He pointed out that we must also manage the excess liquidity in the sector differently – hence the proposals to increase the required reserve ratio.
– We must strive – regardless of the level of the reference price – that the instruments are such that the market price in Bologna is close to the reference price. At the moment, it is not so, because the required reserve ratio is very low – he added.
The start of monetary policy tightening is favored by the high adaptability of the Polish economy to the epidemiological situation.
Even if we witness the fourth wave of severity that leads to the re-imposition of some restrictions in the economy, in line with inflation expectations for July, the impact of these restrictions on the economy will be less than in previous waves. We underestimate the ability of the economy to adapt. The council member said that it is – in my opinion – very huge, and the economy is well-adapted to the epidemiological conditions in which we operate.
– At the September meeting, I will vote for a rate hike. The optimal reaction at this point is a signal reaction and a 15 basis point rate hike – I maintain this and will support such a conclusion at the next meeting – Hardt concluded.
Record inflation in Poland
as Reported on Business Insider PolskaAnd Inflation accelerated to 5.4% in August. every year. A month ago, it was 5 percent. Recently, prices rose faster in June 2001, so We have inflation at its highest level in more than twenty years.
Economists, although they expected an acceleration in price growth, were surprised by the pace. Their forecasts most often refer to the estimate of 5.2%. yyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyy
However, we are not only breaking the notorious long-term internal records, but also bypassing most of the world with increasing pricesWith the exception of two African countries unmatched in this category: Zimbabwe, Zambia and Iran, where prices rose from 24.6 to 56.4 percent. annually.
The response to the very rapid pace of price growth may be the fact that the Monetary Policy Board has raised interest rates. This is predicted, among other things, by the Institute of International Finance. “Rate increases are also likely to occur in Romania (by 75 basis points) and Poland (by 90 basis points), although central banks in both countries seem to believe that broad-based inflation will slow significantly as the pandemic cost pressure eases. significantly increased by half of 2022” – the Foundation announced in its report.
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