Change in Polish rates possible from mid-2022, says central bank governor

WARSAW: Poland's central bank will start thinking about changing monetary policy in the middle of 2022, governor Adam Glapinski said on Friday, adding that the Monetary Policy Council (MPC) was not discussing cutting rates.

The issue of when monetary policy should start to be normalised has come into sharp focus of late due to a spike in inflation. But Glapinski has stressed that he regards this as a temporary phenomenon driven by factors beyond the scope of policy.

"If there are reasons to change monetary policy, not a single month will be wasted and we will start it right away," Glapinski told a news conference. "In the light of today's knowledge we will probably start it in the middle of next year."

He added that before the central bank raised rates, it would first stop purchasing government and government-backed bonds on the seconday market. "When we stop quantitative easing, then it will be time to act on rates," Glapinski said.

Inflation in Poland shot up to 4.3% in April, a flash estimate showed, coming in well above the central bank's target range of 2.5% plus or minus one percentage point.

However, Glapinski reiterated that the main factors behind this increase were fuel prices and administered costs such as refuse collection. "There are no grounds to argue that the monetary policy excessively boosts inflation," he said.

Glapinski also said he did not expect the central bank to intervene in the currency market in the near future. In December, the central bank intervened to weaken the zloty.

"Our goal is neither a weaker zloty nor a stronger zloty," he said.