MNI NBP Review - May 2025: Toning Down Dovishness
Download Full Report Here
Executive Summary:
- The NBP reduced rates by 50bp in its first cut since October 2023.
- The decision was framed as an “adjustment” rather than first step in a cycle.
- Governor Glapiński guided that the central bank will likely pause in June.
The National Bank of Poland (NBP) reduced the reference rate by 50bp and framed it as an “adjustment” rather than a start of a cycle. Despite acknowledging familiar disinflationary dynamics, Governor Glapiński used his press conference to tone down expectations of aggressive monetary easing. He firmly guided towards a pause in June, while suggesting that the next cut could be delivered in July or after the summer, depending on incoming data. He also conceded that the next move in rates will likely start a cycle of cuts, but easing will likely be delivered in standard 25bp increments. In a surprising twist, he said that the Monetary Policy Council (MPC) will next month discuss adjusting the parameters of reserve requirements and could also debate changes to the interest-rate corridor.
