WARSAW, Oct 12 (Reuters) - Poland does not currently face inflationary pressures that would require an interest rate hike, central banker Jerzy Kropiwnicki told business daily Parkiet in comments published on Saturday.
Poland’s benchmark interest rate has been at a record low of 1.5% since 2015, but minutes from sittings of the monetary policy council (MPC) show that motions were raised for both an increase and cut in rates in recent months.
“I do not currently see grounds for inflationary processes to intensify, especially those which could be a premise for raising interest rates,” Kropiwnicki said.
According to the MPC member, food price inflation earlier in 2019 was due to drought, and therefore beyond the scope of monetary policy, while an expected sharp increase in oil prices following an attack on a Saudi refinery did not materialise.
A cut in interest rates also did not make sense at this point in time, Kropiwnicki added.
He said he views interest rates as a good tool for cooling the economy, but less effective when it comes to stimulating it.
“Cutting rates only makes sense when businessmen are full of optimism and treat the cost of credit as an obstacle. You can’t see anything like that today,” he said.
Kropiwnicki said he does not see recent moves to increase the minimum wage as a factor that might contribute to inflation, but that he takes this possibility into consideration.
Poland’s ruling nationalist Law and Justice (PiS) party pledged to almost double the minimum wage by 2023 ahead of parliamentary elections on Sunday.
Reporting by Alan Charlish Editing by Clelia Oziel