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Poland's central bank keeps rates unchanged, points to a slowdown ahead

Anna Koper

WARSAW (Reuters) – The National Bank of Poland (NBP) kept its main interest rate at 6. 75%, the company said on Wednesday it had opted to keep borrowing costs unchanged as it warned of a slowdown in the economy in the coming months despite soaring inflation.

Polish policymakers also signaled that rate hikes are nearing an end as regional peers complete their monetary tightening cycle.

However, with inflation rising to 25.2% in September, the highest since 1997 level, most economists had predicted that the cost of credit would continue to rise.

Economists polled by Reuters had expected the main interest rate to rise to 7. 00%.

“The Board assesses that the NBP’s significant tightening of monetary policy to date…will have Help to dampen demand growth in the Polish economy, which will support lower inflation in Poland’s progress towards the NBP inflation target,” the bank said in a statement.

The bank said it expects economic growth to slow in the coming quarters.

“In our view, the economic situation in Europe and the United States suggests that there is less room for further rate hikes,” the Polish Institute of Economic Research said in a report.

“Possible further rate hikes will be in response to a surprise to higher inflation or stronger currency depreciation.”

However, ING analysts said they expect 2024 further tightened due to high inflation and said it was “risky” to rely on an economic slowdown to dampen price growth.

PLN is 0. 48 GMT 1420 EUR/EUR weakened.

Poland’s decision follows similar moves by Hungary and Czech Republic.

Hungarian central bank raises benchmark interest rate The range is higher than expected 125 basis points to 13%, but indicates the end of the rate hike cycle in the event of an economic slowdown, while Policymakers in the Czech Republic kept interest rates at 7.00% for the second time in a row.

Central Bank of Romania raised the benchmark interest rate more than expected 75 basis points reached 6 on Wednesday. 25 %.



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