The Polish Monetary Policy Council decided to leave its benchmark reference rate at 1.5%, which is in line with market consensus. The council's rhetoric is unchanged. The MPC confirmed the end of the rate cut cycle and monetary tightening will be not on the MPC's agenda in the coming months.
"We think that the MPC will remain in wait-and-see mode this year. In our opinion, the next tightening cycle will not start until Q2 2016." said Societe Generale
The council's view is that "the annual price growth will remain negative in the coming quarters, mainly due to the previously observed sharp fall in commodity prices. At the same time, the expected gradual acceleration of economic growth, amidst recovery in the euro area and good situation in the domestic labour market, reduces the risk of inflation remaining below the target in the medium term."
The NBP will not use forward guidance. Belka is against this tool. He pointed out that several central banks have decided not to use forward guidance. Belka added, "In Poland things are much more stable than globally, but we are not so isolated from the global economy."
"In our opinion, the Governor's comments were neutral for investors." adds Societe Generale
