Poland raises interest rates to limit inflation (after the purchase of a lot of gold)
A real surprise came from Poland, whose central banks unexpectedly raised interest rates by 40 basis points, giving in to pressure to fight rising inflation that has already prompted neighboring Hungary and the Czech Republic to start tightening. monetary policy. None of the 29 economists surveyed by Bloomberg had predicted the increase that pushed the benchmark rate to 0.5%, compared to an inflation of 5.8%.
Here is the trend of Polish inflation
Poland's first hike since 2012 came the day after central bank governor Adam Glapinski signaled decision makers' willingness to raise rates, even though he didn't mention the imminent decision. It also comes a day after the central banker said Poland would try to buy 100 tons of gold in 2022.
A closer look at the statement reveals that the decision appears to have been somewhat chaotic and while it stated that it was motivated by an attempt to reduce inflation to its medium-term target, the statement also does not specify whether it is a one-time decision. tantum or the first step of a long-term trend reversal.
Unlike the Fed, at least Poland has had the guts for inflation which appears to be no longer transitory, and instead “could stay high for longer than expected”.
"Between a probable further economic recovery and favorable labor market conditions, inflation could remain high for longer than expected"
"Even if the impact of some factors of supply currently increasing inflation will decrease next year, the increase in global prices of both energy and agricultural commodities observed in recent months could still increase price growth. in the coming quarters ". at the same time, growth appears to be sufficient to maintain sustained growth despite the rate hike, as can be seen.
Unemployment also allows a positive view of the situation
Bloomberg notes that the statement also omitted a sentence that said the central bank will continue its bond purchase program. So Polish QE, in favor of the government, will not stop too soon, like that of the ECB.
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The article Poland raises interest rates to limit inflation (after buying a lot of gold) comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-polonia-aumenta-i-tassi-di-interesse-per-limitare-linflazione-dopo-lacquisto-di-tanto-oro/ on Wed, 06 Oct 2021 20:17:10 +0000.