Poland’s Glapinski says demand may drive CPI in autumn -FT

Article content

Demand-driven inflation that would require a response from the Polish central bank could appear in autumn, or maybe mid-2022, Governor Adam Glapinski said https://www.ft.com/content/e51c6e59-12d1-4ec2-a82c-ea36891e60fd in a Financial Times interview published on Sunday.

But current inflation levels were not worrying, he said.

A spike in inflation caused central banks in the Czech Republic and Hungary to raise rates in June, but the National Bank of Poland has stuck to dovish rhetoric, maintaining that the driving factors were temporary and not influenced by monetary policy.


Article content

“If we see that there is a tendency that in a few quarters this rise in prices could be driven by these demand-side factors, then we will act,” he was quoted as saying.

“When will it happen? It’s hard to say precisely, but rather not earlier than in the autumn of this year. Or maybe only halfway through next year.”

Monthly inflation in Poland stood at 4.4% year-on-year in June, well above the central bank’s target range of 2.5% plus or minus one percentage point.

Glapinski reiterated that regulatory and supply-side factors were currently driving inflation, and that when these were stripped away, inflation was closer to the midpoint of the target range.

“Our approach is similar to that of the Federal Reserve, or the ECB: we are waiting for the economic recovery to become certain and solid, and then we will observe whether there is a risk of a rise in inflation,” he said.


Article content

“And we certainly won’t hesitate: we will act immediately as soon as it is necessary.”

In a separate article https://www.omfif.org/2021/07/currency-intervention-can-help-counter-covid-crisis published on Sunday, Glapinski said that interventions in the currency market could help deal with the effects of the COVID-19 pandemic.

In December, the NBP intervened in currency markets to weaken the zloty. It has also been buying government and government-secured bonds on the secondary market since the first wave of the pandemic in 2020.

“We need to focus on keeping the recovery going… If this requires foreign exchange intervention to hold down otherwise unacceptable currency appreciation, then that is a legitimate line of defense,” he wrote in the article for the Official Monetary and Financial Institutions Forum.

“The best way forward for Poland and other emerging market economies is to use a mix of conventional and unconventional monetary policies.” (Reporting by Maria Ponnezhath in Bengaluru, Alan Charlish in Warsaw; Editing by Clarence Fernandez, Raissa Kasolowsky and Nick Macfie)


In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.


    Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

    Source link


    PMGKAY: States, Union Territories start lifting May quota of free food grains

    This allocation is in addition to regular NFSA allocation and 79.39 LMT food grains have to be issued under the said scheme.The Centre...

    Thousands march in support of Muslim family killed in truck attack in Canada

    Article content LONDON — Thousands of people marched on Friday in support of a Canadian Muslim family run over and killed by a...

    ipo: Explainer: How Chinese clampdown will target offshore listings

    HONG KONG: China's securities regulator is setting up a team to review plans by Chinese companies for initial public offerings (IPOs) abroad, sources...

    Climate change: Basel must meet Paris

    A delayed response or measured indifference to this issue could turn out to be irreparably expensive for the financial sector.By Runa Sarkar &...

    Residential HVAC Installation: Why You Need Professionals for Heating and Cooling

    Which may cost them more if not handled by experienced Residential HVAC Technicians. In addition, we guarantee our workmanship, so there isn't any reason why people should try to do it themselves.