Central bank chief: we will keep raising interest rates until we're sure inflation is dropping

"The Monetary Policy Council has been raising interest rates for a few months now. We will keep on doing that until we are certain that inflation is on a permanent decrease," Chairman of the National Bank of Poland Adam Glapiński said at a press conference on Friday (May 6).

He explained that the Council's medium-term goal is to decrease inflation within a two-year period, but at the same time to sustain economic growth. "We don't want to overdo, that is to push the economy into poor condition and cause unemployment," the NBP chief said.

Glapiński underscored that for the last three years the central bank has been operating under huge uncertainty and extremely powerful shock factors, such as the pandemic and war in Ukraine. "At the same time, we have a very good situation on the job market and unemployment is virtually unexistent, which is an incredible achievement," he said.

The central bank president once again rejected the assertion that the process of raising interest rates had begun too late.

He argued that main reasons behind high inflation were global issues, such as increase in the prices of gas, oil, electricity and food. He also said that high prices were partially sparked by the increased consumer demand on the part of the refugees from Ukraine residing in Poland.

He also said he was aware how the interest rates increase was affecting loan borrowers. "At some point, I hope that by the end of 2023, credit borrowers will hear about interest rates going down," he assured.

Adam Glapiński added that the NBP was forecasting that the inflationary peak would take place in June-July this year, as long as circumstances don't change.