WARSAW, July 15 (Reuters) - Poland may need to raise interest rates as soon as early 2018 because of risks to the inflation outlook or if real interest rates stay below zero percent for too long, the business daily Parkiet cited a central banker as saying.
Eugeniusz Gatnar told the newspaper he believes inflation may reach the central bank’s target of an annual 2.5 percent faster than by the end of 2019 as envisioned in the bank’s recent analysis, prompting a need to increase rates.
Poland’s 10-member rate-setting Monetary Policy Council has held the benchmark interest rate unchanged at an all-time low of 1.50 percent since a 50-basis-point cut in March 2015.
“Reaching the inflation target would speak in favour of raising rates, but there are different reasons as well,” Gatnar said.
“I’m concerned about the consequences of real interest rates staying negative for too long. We cannot allow a decimation of Polish people’s savings, which are not big as they are.”
Real interest rates are adjusted to remove the impact of inflation. If they stay negative for too long, the value of savings decreases.
Gatnar echoed another central banker, Jerzy Osiatynski, who told Reuters this week that he could vote in favour of raising rates before the end of 2018 if there is a visible risk to the inflation outlook stemming from wages.
Their stance contrasts with that of central bank governor Adam Glapinski, who earlier in July said he would support interest rates remaining stable until the end of 2018.
Reporting by Anna Koper and Lidia Kelly; Editing by Dale Hudson