Polish opposition leader says rate cut decision was political
Reuters
Published Sep 07, 2023 12:07
WARSAW (Reuters) - The leader of Poland's largest opposition party accused central bank governor Adam Glapinski of acting under political influence on Thursday, after a bigger-than-expected rate cut stunned markets weeks before a parliamentary election.
Poles will vote on Oct. 15 and with the cost of living a key battleground, a 75-basis-point cut in the benchmark interest rate on Wednesday came as welcome news to people struggling with higher mortgage repayments.
However, economists have said that with inflation still in double digits, lowering the main interest rate to 6.00% risks entrenching high price growth. A narrow majority of analysts polled by Reuters had expected a 25-basis-point cut.
A government spokesman on Wednesday rejected any suggestion of political influence over monetary policy, saying that the central bank was fully independent.
"There is no doubt that Governor Glapinski made a decision that borrowers may like, and it was no accident that he made this decision, and on a surprising scale, a month before the elections," said Donald Tusk, leader of the liberal Civic Platform (PO) party.
"Why should we kid ourselves when we all know why they waited so long and now they've really gone all in on interest rates... We have no doubt today that Glapiński is fully involved in politics and elections."
Glapinski is scheduled to hold a press conference at 1300 GMT. The National Bank of Poland (NBP) did not immediately reply to a request for comment.
The central bank governor is an ally of the ruling Law and Justice (PiS) party, with links to its leader Jaroslaw Kaczynski that go back decades.
The main interest rate had been on hold at 6.75% since September 2022. The announcement of the rate cut sent the zloty down as much as 2% on Wednesday, while banking stocks took a hammering.
Tusk said that he hoped "people don't pay too much" for the decision as it will hamper the fight against inflation.
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Written By: Reuters
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