Maslowska sees case for January hike as Poland watches energy caps and politics

Inflation outlook nudges policy toward tightening

Gabriela Maslowska said the latest projections strengthen the argument for raising borrowing costs early next year. The Monetary Policy Council left the benchmark at 3.75% last week, yet the projection puts consumer-price growth at 4.6% over the first half of next year, topping the central bank's upper target. That view has already spurred some officials to suggest a hike at the December meeting.

Maslowska told Bloomberg that deciding at the start of next year would be "more appropriate." Waiting, she said, gives the bank time to see whether caps on fuel and on regulated energy prices will be extended.

Politics weighs on the currency

She noted that November marked the first meeting in months where increases were put on the table. Maslowska also attributed the zloty's slide to a three year low versus the euro to what she called government moves undermining the central bank's independence and a fight over the country's top court.

The political backdrop is tense. Earlier this month, authorities sent police to the Constitutional Tribunal, after which its chief justice and deputy were suspended, intensifying a growing confrontation with the president, who is backed by the opposition. Security concerns also intensified following Saturday's mass shooting in Krakow.

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Poland's currency traded around 4.3856 per euro in early afternoon in Warsaw, roughly flat on the day and a touch stronger than the Hungarian forint.

The governor's risk and why it matters for policy

Maslowska, a former Law and Justice lawmaker appointed to the MPC in 2022, flagged the fate of central bank Governor Adam Glapinski as a key risk. As he is aligned with the previously ruling nationalists, a vote may soon be held on trying him before a special tribunal that hears cases involving top state officials. Such a step could lead to his suspension, a move Glapinski is fighting while rejecting claims he sought to aid the prior government ahead of the last parliamentary elections.

"Bringing the governor before the Tribunal would mean the Monetary Policy Council would lose its decision-making powers," Maslowska said. For your portfolio, that means policy continuity is on the line right as inflation looks set to run above target and rate talk heats up.

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