March 22, 2018 / 10:45 AM / 10 months ago

UPDATE 1-Polish central banker says next rate move might be a cut

(Adds quotes, details)

By Marcin Goettig

WARSAW, March 22 (Reuters) - The Polish central bank’s next move in interest rates might be a cut, central banker Jerzy Zyzynski said, adding there was currently no reason to change the level of interest rates.

Zyzynski’s comments reflect the stance of central bank Governor Adam Glapinski and support expectations that interest rates in Poland will remain unchanged in the coming quarters.

Glapinski said earlier in March that he saw no reason to raise rates until the end of 2020, given current forecasts, and also suggested the next move might be a rate cut .

“I agree with Glapinski,” Zyzynski said in comments authorised for release on Thursday. “I think that we have no reasons to change interest rates because the economy is stable and it is growing.”

Asked if the next rate move would be a cut, Zyzynski said, “I do not exclude this”.

Derivatives markets are pricing in stable rates this year and about 40 basis points of monetary tightening until the end of 2019.

The central bank has kept its main rate at 1.50 percent since a 50-basis-point cut in March 2015.

“The central bank can tighten policy only if there is excessive pressure from (the expansion of) credit, which is not the case now,” Zyzynski also said.

The central bank targets inflation at 2.5 percent with a target band of 1.5 to 3.5 percent. It fell more than expected to 1.4 percent year-on-year in February, its lowest level in more than a year. (Reporting by Marcin Goettig, editing by Larry King)

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