Rate cuts far from certain as list of candidates for Poland's MPC builds

By bne IntelliNews December 22, 2015

The Polish Senate has reportedly named its three candidates for seats set to become available on the rate setting Monetary Policy Council (MPC), local media reported on December 22.

January and February will see the terms of eight of the 10 members of the MPC end. It has been widely forecast that the new Law and Justice (PiS) government wants to fill the rate setting body with doves that are ready to ease policy in order to boost the economy. However, the signs thus far suggest appointees will arrive with no little independence, and ready to continue the panel's tradition of conflicting opinion.

The candidates will be proposed by both houses of parliament and the president. That essentially means PiS will have a clear pick as it holds majorities in the lower house and the Senate, while the president was a party member until his election in May.

The Senate has proposed Professor Eugeniusz Gatnar, a member of the baord at the National Bank of Poland, Jerzy Kropiwnicki and Marek Chrzanowski, PAP reports citing the Senate secretariat. The lower house of parliament picked two candidates, Eryk Lon and Grazyna Ancyparowicz, on December 21.

Ancyparowicz has come out quite clearly on her vision of the monetary policy, telling pro-PiS media recently that monetary easing is not required in Poland at the moment. Several others speculated over the past month to be set for selection have made similar statements since PiS took office.

The NBP's Governor Marek Belka - whose term is up in June - has also said he does not expect new members of the council to call for a rate cuts. "There is no festival of promises in this regard," Belka told a news conference on December 22.

However, analysts are less certain that the current 1.5% will remain the historic low. Much remains unknown for the meantime, they suggest at BGK. The Sejm still has until January 10 to pick its third candidate. President Andrzej Duda will pick his pair in February.

“The March sitting of the MPC, which will be the first to feature the full new line-up, will be key," BGK points out. "It will be accompanied by a presentation of the central bank’s new inflation projection," the bank adds. The MPC will clearly be watching to see if Poland's ongoing deflation run will extend into the new year, after disappointing in recent months.





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