WARSAW, Feb 23 (Reuters) - Polish rate-setter Henryk Wnorowski said that while the central bank was well advised to stay put for now, he would not rule out interest rate cuts later this year with inflation likely to return to its target in March.
The National Bank of Poland has kept its main interest rate at 5.75% since October and Governor Adam Glapinski has said it could remain there for the rest of the year given "very high uncertainty" over the outlook for inflation.
"Currently, a 'wait and see' approach is highly advisable," Wnorowski told Reuters.
"We are observing all incoming data and assessing the situation, and if it turns out that such a possibility or necessity is possible, I do not rule out interest rate cuts this year," he said in remarks cleared for publication on Friday.
Polish inflation, one of the highest in the European Union, peaked at 18.4% a year ago and has been coming down since. It last stood at 3.9% in January.
Wnorowski said he expected inflation to keep trending lower this month and next, when it should fall to the mid-point of the central bank's 1.5%-3.5% target range.
"In March it will most likely be exactly on point, within the inflation target. I think it will be around 2.5%, maybe even 2.4%."
Next month's preliminary inflation data will be published on March 29.
The next meeting of the 10-member Monetary Policy Council, in which Wnorowski is considered a moderate member, will be held on March 5-6 when the policymakers will review the bank's new inflation projection.
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The central bank's caution reflects uncertainty over whether the government will extend or modify policies implemented to help households cope with soaring prices.
A suspension of value-added tax on food expires at the end of this quarter, while another law designed to curb energy prices is currently set to remain in force until the end of the second quarter.
Wnorowski said the expiry of such schemes could drive up inflation in the second half of the year, with some estimates that it will accelerate to 6%. However, in his opinion, inflation will be lower.
Wnorowski also criticised the ruling coalition's plans to bring Glapinski before the State Tribunal, saying they were harmful for the image of the central bank and the country.
"Financial markets are observing this, and these unnecessary attacks make it harder for all of us to work and perform our tasks," he said.
Reporting by Pawel Florkiewicz; Editing by Tomasz Janowski
