“The National Bank of Poland (NBP) will not allow the currently elevated inflation to persist, due to external factors – supply shocks,” said the President of the NBP and the chairman of the Monetary Policy Council (MPC) Adam Glapiński. He stressed that “the necessity to adjust the monetary policy is approaching”, and if the second-round effect appears, a decisive withdrawal of monetary accommodation will be needed.
“We will support the government’s economic policy all the time, also in order to achieve a stable price level and a strong zloty ultimately. A strong zloty means a stable zloty in which it is worth saving and investing, it is not about increasing its exchangeable power against other currencies. that the NBP will not allow the persistence of the currently increased due to external reasons – supply shocks, inflation,” said Glapiński during his speech at Congress 590.
“Of course, the necessity to adjust the monetary policy is approaching, as the economy is accelerating, ie [interest] rate hikes too. But this should not obscure the challenges facing our economy,” added the head of the central bank.
He noted that if external price impulses were translated into expectations and wages, they would perpetuate inflation, which is temporary for the time being.
“We say with full conviction that inflation is temporary, but we have to see if this temporary inflation resulting from external cost and supply shocks does not transfer to our economy in the form of a spiral of prices and wages, wage demands in particular. there is no such situation, but certain things can be disturbing. We are looking at what the situation will be in two, three, four quarters, in five. If we believe that such a threat exists – we will need a strong withdrawal of monetary accommodation, loosening in this – low rates “- stressed the head of the central bank.
He pointed out that the most important challenges currently facing the Polish economy are the demographic challenges and those related to the energy transformation.
Source: NBP and ISBnews
