WARSAW -Polish interest rates could rise to 7.5%, central banker Henryk Wnorowski was quoted as saying on Tuesday, as emerging Europe’s largest economy battles surging inflation that has been exacerbated by the war in Ukraine.
Inflation in Poland hit 11% in March according to statistics office data, and the central bank responded with a bigger-than expected 100-basis-point rate hike to 4.5% in early April.
“Markets must also take into account that interest rates can go as high as 7.5%,” Wnorowski was quoted as saying by the Business Insider website. “Today we operate in a situation in which we cannot impose any limits, no boundaries.”
Wnorowski is a member of the central bank’s monetary policy council.
He said he saw no prospects of halting the cycle of rising interest rates in the coming months unless the war in Ukraine ended. However, he said he expected future rises in interest rates would each be smaller than 100 basis points.
Poland’s central bank targets inflation of 2.5% plus or minus one percentage point. Wnorowski said he did not expect consumer price inflation to fall below 3.5%, the upper limit of the target range, until 2024.