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NBP Governor interviewed by the Hungarian business daily Világgazdaság

Date: 16-11-2021

“In order to reduce the risk that inflation will also remain elevated in the medium term, NBP raised interest rates in October and November, including raising the reference rate to 1.25%. […] Further decisions will depend on the future assessment of the situation and the inflation outlook,” says Governor of NBP, Prof. Adam Glapiński in an interview for the Hungarian business daily Világgazdaság

Today’s Világgazdaság has published an interview with Prof. Adam Glapiński, Governor of Narodowy Bank Polski.

Below we present chosen excerpts from this interview.

  1. This elevated inflation is due to a combination of several shocks of a global nature. Above all, it is the rapid growth in global prices of energy commodities and – in the recent period – also of agricultural commodities. In addition, global prices are boosted by disruptions in global supply chains and markedly higher international transport costs than in previous years. And in Europe, rising prices of CO2 emission allowances as a result of the EU’s climate policy are also boosting inflation. Of course, the economies of Central and Eastern Europe are not immune to the effects of such shocks and price growth is also elevated in our region.
  2. […] there is a risk of inflation persisting at an elevated level, particularly in countries where we observe a marked increase in economic activity. It should come as no surprise that the central banks of Central and Eastern Europe operating in similar conditions have taken similar measures. […] the decisions of the central banks – both up to now and in the future – depend on their assessment of the current economic climate and inflation as well as the outlook in the individual economies. Differences in these assessments translate into differences in timing the start of monetary policy tightening, its scale and its pace.
  3. […] In view of the uncertainty about the impact of the autumn wave of the pandemic on the economic situation, we judged that a little more caution in our actions was justified. Yet, when this uncertainty declined and at the same time the risk of inflation persisting at an elevated level appeared, we took decisive action.
  4. […] inflation trends in individual countries of the region remain similar, so the moment of the first interest rate hike does not matter so much here.
  5. […] our future decisions, as always, will be based on the incoming data and information, their assessment and the subsequent formulation of forecasts. This is why we do not make any declarations in this area. The only thing I can assure you is that NBP will not allow inflation to persist at an elevated level.
  6. […] along with September’s sharp rise in energy and agricultural commodity prices and reports of prolonged disruptions in the global supply chains, the likelihood increased that inflation would be even higher and that it would persist at an elevated level longer than we previously expected.
  7. In order to reduce the risk that inflation will also remain elevated in the medium term, NBP raised interest rates in October and November, including raising the reference rate to 1.25%. This basically means the withdrawal of accommodative monetary policy introduced in response to the crisis. Further decisions will depend on the future assessment of the situation and the inflation outlook.
  8. […] there are no doubts that the actions of NBP are favourable for the Polish zloty. This is because NBP conducts monetary policy in such a way that it ensures price stability in the medium term, at the same time supporting growth in activity in the Polish economy. Thus NBP contributes to the creation of attractive and stable conditions for the realisation of medium- and long-term investment projects.
  9. The decisions of the Monetary Policy Council of October and November were decisive and aimed at reducing the risk of inflation persisting at an elevated level.
  10. As far as the exchange rate is concerned […] its current level supports growth in economic activity. […] in view of the strong negative external shocks, even a marked appreciation of the exchange rate would not lead to a significant fall in current inflation. However, it would be painful for exporters and therefore unfavourable for the economy.
  11. […] the central bank in Poland has an established tradition of independence from political factors – both domestic and foreign. And nothing has changed in this matter. NBP will continue to conduct monetary policy in such a way – taking into account the current and forecast macroeconomic situation – as to ensure the stability of the Polish zloty.

We encourage you to read the entire interview at: Nem lát kamatemelési versenyt a régióban a lengyel jegybankelnök (vg.hu)

NBP Governor interviewed by the Hungarian business daily Világgazdaság

NBP interest rates

Reference rate 1.25
Lombard rate 1.75
Deposit rate 0.75
Rediscount rate 1.30
Discount rate 1.35

Exchange rates

Table of 2021-12-01
1 EUR4.6494
1 USD4.1051
1 CHF4.4652
1 GBP5.4651
100 JPY3.6181

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Narodowy Bank Polski
Świętokrzyska 11/21
00-919 Warszawa
Poland

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