Poland’s Monetary Policy Council opted against a reduction in interest rates on Wednesday, choosing to stay at 6.75 percent, the same level since September last year.
It is now unlikely that there will be a rate cut by the end of the year, as the decrease in inflation has been slower than expected.
Pressure on rising prices in the economy persists, and core inflation, which excludes energy and food, has significantly increased. In January it hit 11.7 percent, rising to 12 percent in February; it is expected to reach a new record in March and remain high in the coming months.
Although demand is currently weakening, it is unclear whether this trend can be sustained during the anticipated economic recovery.
Poland’s battle against inflation may also be hindered by the situation in global financial markets, with concerns over the stability of financial institutions reducing the central banks’ willingness to raise interest rates.
The National Bank of Poland (NBP) suggested last month that a decrease in interest rates could be possible if inflation reached around 7 percent at the end of the year. However, this scenario is becoming increasingly less realistic.