Iwona Duda told Bloomberg, "The baseline scenario remains that rates will remain unchanged at least through the end of this year." She added there is no immediate need to tighten, "but of course we are prepared to take any appropriate action in response to incoming data to prevent inflation expectations from becoming entrenched at an elevated level."
Poland's rate has been held at 3.75% since March. The council, which has 10 members, is scheduled to gather on Sept. 8-9.
The inflation goal is 2.5% with a tolerance of plus or minus 1 percentage point. Price growth picked up to 3.4% in August, and Duda said it might temporarily move above the tolerance range by year-end. She called the latest reading "a signal that requires attention."
She pointed to the lapse of government fuel-price caps and rising fertilizer costs as upside risks, warning that more expensive fertilizer could lift food prices that have been holding down the broader CPI. She also flagged Poland's loose fiscal stance as adding to inflation pressures.
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Traders using forward-rate agreements are pricing roughly three quarter-point hikes over the next 12 months. Duda identified supply disruptions linked to the Iran conflict as the foremost risk, adding that the murkiness around prices warrants "increased caution and vigilance" in policy.
"At this point, any expectations of rate cuts in the coming quarters are not justified," she said, adding that talk of easing only comes back "once inflation falls to the point target of 2.5% and remains there on a sustained basis." Translation for your budget planning: if you are hoping for cheaper borrowing soon, build in the possibility that rates stay steady or even tick up before they come down.
