(Bloomberg) — Poland’s central bank will likely keep borrowing costs unchanged three months after an abrupt cut triggered market turmoil — and as the pace of ebbing inflation slows.
Policymakers in Warsaw will leave the main rate at 5.75%, according to all of 36 economists surveyed by Bloomberg. It’s a contrast with September, when Governor Adam Glapinski’s unexpected decision to slash the benchmark by 75 basis points prompted a drop in the zloty and accusations of political interference for his allies in the ruling Law & Justice party.
But after the nationalists lost their majority in the October election, Glapinski surprised again by halting the monetary easing cycle, citing new fiscal risks. The governor, who’s come under scrutiny from the incoming government to be led by Donald Tusk, said March will be key for any further decisions, when a new inflation projection emerges along with better clarity over policy.
The political fight over Glapinski is being scrutinized by investors. Tusk, a former European Council president, and his allies have pledged to put the central bank chief in front of a special tribunal in a probe into political partisanship, irregularities in the bank’s bond-buying program and failure on inflation.
Glapinski, who will hold a press conference Thursday at 3 p.m. Warsaw time, has consistently rebuffed the accusations.
A potential probe against the monetary policy chief is backed by more than half of Poles, a recent poll by United Surveys for daily newspaper Dziennik Gazeta Prawna and RMF FM radio showed.
The central bank’s rate-setting Monetary Policy Council will in any case respond to inflation, whose pace of decline slowed in November, while the Polish economy grew faster in the third quarter than preliminary data showed.
Rafal Benecki, chief economist at ING Bank Slaski SA, said he expects rates to remain unchanged until the central bank issues its new inflation projection in March. The MPC “rarely” makes changes in December, he added.
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