Poland could rate cuts in second half of 2025, c.banker and IMF say

WARSAW, March 5 (Reuters) - The Polish central bank's Monetary Policy Council may start thinking about easing monetary policy in the second half of 2025, central banker Ludwik Kotecki said on Wednesday, a view echoed by the International Monetary Fund.

The National Bank of Poland has kept interest rates unchanged since October 2023 with the reference rate at 5.75%.

"What we should do is slowly start thinking about cuts (in rates), and the second scenario is what we will do ... I assume that these cuts will only happen in the second half of the year," the MPC member told the European Financial Congress event in Warsaw.

In January, Kotecki told Reuters the MPC should consider rate cuts this year and they could happen in June or July.

The zloty has appreciated to a 10-year high against the euro, becoming something of a disinflationary factor that analysts say increases the pressure to cut borrowing costs, but Kotecki expressed a cautious view.

Referring to the exchange rate, he said: "It helps us with disinflation but it can be a hindrance elsewhere".

The IMF also predicts that Poland could begin slowly easing monetary policy in the second half of the year.

"Our view is that cuts possibly can begin in the second half of this year but should move fairly slowly given all the risks to this inflation," IMF representative in Poland Geoff Gottlieb said on Wednesday.

"The final step on inflation is not yet done, so it’s important not to rush the return to a neutral monetary stance."

The Polish inflation rate stood at 5.3% in January, while the central bank's inflation target is 2.5% plus or minus one percentage point.

Central bank governor Adam Glapinski said in February there were no grounds for lowering borrowing costs at the moment.