Hike rates

Poland doesn’t have enough space to raise rates, says central banker Kochalski

WARSAW, Oct 18 (Reuters) – Poland’s central bank does not have enough room to raise interest rates amid an expected economic slowdown, central banker Cezary Kochalski said on Tuesday.

Polish inflation would remain high in the coming months and in the first quarter of 2023 but would not exceed 20%, Kochalski told TVN24 television in an interview.

Poland has plenty of room for interest rate hikes, and a 100 basis point hike may be needed in November, central banker Joanna Tyrowicz said on Tuesday.

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“I’m far from that opinion, it seems there’s no room for it,” Kochalski said when commenting on Tyrowicz’s remarks.

“Further drastic interest rate hikes would bring inflation down, but at a very high cost to society,” he said.

In October, the National Bank of Poland (NBP) kept its main interest rate at 6.75%, opting to leave borrowing costs unchanged despite soaring inflation, as it warned against an impending economic downturn.

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Reporting by Marek Strzelecki Editing by Chris Reese and Sandra Maler

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