Polish National Bank likely to keep interest rate on hold in February

The Polish National Bank is set to meet this week for its monetary policy decision. According to an Erste Group Research report, the central bank is expected to keep the interest rate on hold at 1.5 percent.

“We think that the MPC will be reluctant to the change policy rate even in the case that downward risks materialize (such as a recession in Germany, an inflation rate below the lower bound of the 1.5 percent target throughout a year)”, said Erste Group Research.

In such a case there is a possibility that some of the members might talk about the unconventional monetary tools.

“We believe, though, that the MPC would be ready to consider them more cautiously only if economic activity weakens to a much greater extent (well below 3 percent) than is currently expected”, added Erste Group Research.