Polish central banker Ancyparowicz says not time to raise rates

Credit: REUTERS/BARTOSZ BANKA

High inflation in Poland is caused by factors that are unrelated to monetary policy and it is not the time to raise rates, central banker Grazyna Ancyparowicz told Reuters on Tuesday, after CPI hit a 20-year high.

Adds details, comments from central banker Gatnar

WARSAW, Aug 31 (Reuters) - High inflation in Poland is caused by factors that are unrelated to monetary policy and it is not the time to raise rates, central banker Grazyna Ancyparowicz told Reuters on Tuesday, after CPI hit a 20-year high.

Polish CPI was 5.4% in August, a flash estimate from the statistics office found, increasing speculation that Poland's central bank could follow its counterparts in the Czech Republic and Hungary and hike rates before the year ends.

"Of course inflation is high, we see that and we are not happy, but it is caused by non-monetary factors and as a result monetary policy instruments...will not solve anything," Ancyparowicz said.

She said policymakers should wait for the central bank's next macroeconomic forecasts in November before any decision on when to tighten policy.

Poland's benchmark interest rate has been at a record low of 0.1% since May 2020.

Markets have been betting Poland's central bank (NBP) could begin its own tightening cycle as soon as November, although the median forecast in a Reuters poll does not see a hike until the first quarter of next year.

Eugeniusz Gatnar, one of the most hawkish members of the Monetary Policy Council (MPC), told private broadcaster Biznes24 that inflation was worrying and interest rates should rise as the economy was recovering.

"Low interest rates are damaging for an economy that is returning to growth," Gatnar said.

"I am concerned about the lack of reaction from the council, most of the MPC, and the lack of a change in rhetoric."

The inflation reading came alongside upgraded second-quarter growth data showing the Polish economy expanded by 2.1% quarter-on-quarter, faster than a flash estimate indicated earlier and among the highest rates in central Europe.

(Reporting by Pawel Florkiewicz, writing by Alan Charlish; editing by Barbara Lewis)

((alan.charlish@thomsonreuters.com; +48 22 104 25 27 ;))

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