By Pawel Florkiewicz and Alan Charlish
WARSAW (Reuters) – Although inflation may accelerate, it is unlikely to exceed the upper limit of the Polish central bank’s target range, meaning that interest rates can stay at current levels this year and perhaps the following, rate-setter Grazyna Ancyparowicz said.
Poland’s benchmark interest rate has been at a record low of 1.5% since March 2015, and while inflation has accelerated recently it is still around the mid-point of the Polish central bank’s target range of 2.5% plus or minus one percentage point.
“In my opinion rates can definitely remain unchanged until the end of this year, and maybe even until the end of next year,” the Monetary Policy Council (MPC) member told Reuters in an interview. Ancyparowicz tends to take a moderate stance on rates and is considered neither hawkish or dovish.
“I will vote like that, even if it turns out that inflation accelerates.”
Most MPC members reiterated their view that rates are likely to remain stable in coming quarters during their June sitting.
While European Central Bank (ECB) President Mario Draghi and the U.S. Federal Reserve both pointed towards easing policy recently, Ancyparowicz does not see any reason to cut rates in Poland.
“I don’t see reasons to cut rates, but I also don’t see a situation in which an increase could cause a change in the economic situation or prevent a rise in prices,” Ancyparowicz said.
Ancyparowicz does not expect a rapid acceleration of prices.
“We have many administered prices and they are kept quite tightly in check… The government will do everything not to increase food and energy prices,” she added.
The ruling Law and Justice (PiS) party passed legislation in December aimed at freezing power prices, and in June it proposed draft regulations that would allow big electricity consumers to receive compensation for surging power bills.
(Reporting by Pawel Florkiewicz and Alan Charlish; Editing by Raissa Kasolowsky)