Although the central bank has not officially declared the end of the tightening cycle it started in 2021, it has entered 'wait-and-see' mode and Governor Adam Glapinski has said that he regards further hikes as "less and less likely". "'Wait-and-see' is an optimistic policy... but I am less optimistic and believe that higher rates would provide a steeper disinflation path," Litwiniuk said. Inflation in emerging Europe's largest economy hit 18.4% in February in part due to soaring food prices.
While most economists agree that this represents the peak of
the current cycle of inflation, the central bank's latest
projections do not show price growth returning to its target
range of 1.5-3.5% until 2025.
Asked if he thought rates could be cut before 2025,
Litwiniuk said he saw "no such chance".
"A reduction in interest rates would lead to a rise in the
future disinflation curve," he said.
(Reporting by Alan Charlish and Pawel Florkiewicz; Editing by
Bernadette Baum)
