"There could be cuts when it is completely certain that inflation is heading towards the target." Inflation was 16.2% in March, according to a flash estimate from the statistics office, compared to 18.4% in February. The NBP targets inflation of 1.5% to 3.5%. The central bank has justified its decision to keep rates on hold in recent months by arguing that a global economic slowdown compared with the effects of the rate hikes it made in 2021 and 2022 will together help to return inflation to single digits in 2023 On Thursday Glapinski said this scenario was starting to play out. "A rapid downward movement has begun... so far everything is going according to our expectations," he said. However, while the headline inflation number fell in March, economists have pointed out that core inflation, which strips out volatile items like food and energy prices, continued to rise. Glapinski said core inflation would start to fall in the second half of 2023. The NBP governor said in March that he expected inflation to be 7% at the end of the year, but on Thursday he revised this up by one percentage point, citing changes to the basket used by the statistics office. (Reporting by Alan Charlish, Anna Wlodarczak-Semczuk, Pawel Florkiewicz, Marek Strzelecki; editing by Jonathan Oatis)
(Recasts with comments on rate cuts, adds details and quotes
throughout)
By Anna Wlodarczak-Semczuk
WARSAW, April 6 (Reuters) - The National Bank of Poland
(NBP) will cut interest rates when it is sure inflation is
heading towards its target, governor Adam Glapinski said on
Thursday, adding that it has not officially ended its tightening
cycle.
With market focus on when the cost of credit in emerging
Europe's largest economy could start to fall, Glapinski had said
in March that he hoped rates could be cut in the fourth quarter.
Poland's main interest rate has been at 6.75% since
September.
"If everything is as we and all analysts expect, there will
not be hikes and at some point there will be cuts," Glapinski
told a news conference.
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