Polish central bank vows to maintain inflation target in 2024

Paweł Pawłowski/PAP

The National Bank of Poland (NBP) will keep its medium-term target range of inflation at 2.5 percent plus or minus one percentage point in 2024 and does not rule out interventions on the FX market, NBP said in the monetary policy guidelines for 2024.

In 2024, NBP will keep the same set of monetary policy measures as those applied in 2023, according to the policy guidelines published on Monday.

"NBP will still use the strategy of a medium-term inflation target of 2.5 percent plus or minus one percentage point" the document reads. "Interest rates will still serve as the main instrument of the monetary policy."

At the same time, the Polish central bank did not rule out "interventions on the FX market." 

NBP vowed to use its instruments in a flexible manner, accounting for market conditions and the aftermath of global shocks such as the Covid-19 pandemic and Russia's invasion of Ukraine. 

At the same time, NBP estimated that Polish inflation should keep on falling in the second half of 2023 and in coming years, with geopolitical factors being the main source of uncertainty for inflation and the economy. 

Current inflation is still four times higher than the NBP's inflation target, at 10.1 percent, according to the latest reading for August. However, it came a long way down from the February high of 18.4 percent. In early September, the NBP surprised the market by a 75 basis points interest rate cut, which brought the reference rate to 6 percent.

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