First interest-rate cut possible at end-2023 says central bank chief

The head of the National Bank of Poland (NBP) has said he hopes it will be possible make the first cut in interest rates at the end of 2023.

The country's Monetary Policy Council (RPP) left rates unchanged after its Wednesday sitting following 11 consecutive increases aimed at stemming inflation, which stood at 17.2 percent in September, according to official figures.

Adam Glapinkski told a press conference on Thursday if an inflation report to be published in November showed that internal factors causing inflation to rise were still developing, more hikes could follow.

He explained that the report would fully assess the effects of the RPP's tightening to date. He added that "the worst that can happen is that we have tightened too much. But I don't thing that has happened - nothing indicates that."

But Glapinski went on to say that he hopes it will be possible to make "the first rate cut at the end of next year" if inflation falls in 2023.

Staying on the subject, the head banker also said that more rate-hikes could "freeze" the economy without bringing down inflation.

"Further rate rises would freeze the economy but would not have any effect - that is the position from yesterday, but (depending on) what we see in November, with the new forecast, we may take other decisions," he said.

Glapinski added that the zloty had weakened considerably but that was not a "catastrophic process."

The weakening zloty, he said, had an effect on inflation but not a large one. "If the zloty rate fell by 10 percent, which hasn't happened, never has and never will, then inflation - according to our data - would rise by one percentage point," he argued.