July 28, 2020 / 7:54 AM / 6 days ago

Polish interest rates unlikely to change in 2020, 2021, central banker says

WARSAW, July 28 (Reuters) - Poland does not need to change its interest rates this year and probably will not have to in 2021, central bank rate-setter Grazyna Ancyparowicz said.

“I don’t think there will be any significant changes in monetary policy until the end of this year and probably there shouldn’t be any next year, assuming, of course, that we won’t have some sort of giant second wave of the pandemic,” Ancyparowicz told Reuters.

“I can’t imagine it being possible to freeze and shut down the economy a second time,” Ancyparowicz said.

The central bank cuts its benchmark interest rate to 0.1% in May. The cost of credit has been lowered by a total of 140 basic points within three months.

“... In my opinion they are already very low (interest rates) and at the moment there is no reason for negative interest rates in Poland,” Ancyparowicz said.

The Polish central bank aggressively loosened monetary policy in response to the coronavirus pandemic, which led many businesses to halt operations and slowed the growth of the Polish economy.

The central bank has projected a 5.4% decline in gross domestic product in 2020, then a recovery to 4.9% growth next year and to 3.7% in 2022.

“I think this projection is cautious, it is cautious optimism,” Ancyparowicz said.

In her opinion, the worst time for the Polish economy, especially for companies, may be the second half of this year, when some elements of the government’s anti-crisis shield programme will cease.

“... Then we will see how many companies really failed... I assume that there should not be a second wave of the pandemic, and if there is, it will be weaker. We are already a bit familiar with this virus, we have learned to live with it,” Ancyparowicz said.

“... At the moment, we have record-low unemployment, a good situation in the budget ... We will also have funds from the EU, and it seems to me that all of this together makes us rather optimistic,” she said. (Reporting by Pawel Florkiewicz, editing by Larry King)

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