Poland’s central bank continues to adopt a cautious approach; we anticipate an upcoming rate reduction soon

Central Bank Signals Possible Easing Ahead

In its latest statement following today's meeting, the Council adopted a dovish stance, indicating openness to further loosening of monetary policy. The Council highlighted that recent data points to a likely drop in CPI inflation during the first quarter, with inflation expected to stabilize near the NBP’s target in the months ahead.

Additionally, the Council observed that although wages rose in December, the overall pace of wage growth slowed throughout the previous year. This suggests that the recent increase is seen as a short-term fluctuation rather than a lasting trend, reinforcing the Council’s dovish outlook.

As for the decision to maintain current policy, it has only been three weeks since the last meeting in January, and no significant new developments have occurred since then.