Poland

The governor of Poland's central bank said Thursday that its large interest rate cut was justified despite high inflation because prices are stabilizing and the era of high inflation is ending, the Associated Press reported. Adam Glapinski spoke a day after the bank's monetary council announced that it was cutting interest rates by 75 basis points, a much larger reduction than had been expected.

Poland is close to overcoming inflation pressures and has done so without overreacting in a way that could have damaged the economy for years, said ruling party leader Jaroslaw Kaczynski, Bloomberg News reported. Polish policy has been aimed at protecting the nation’s labor market, Kaczynski said in Janow Lubelski in the nation’s east on Saturday. An overresponse to the sudden price increases following Russia’s invasion of Ukraine in 2022 could have suppressed the nation’s growth for as long as six years, he added.

Polish banks suffered a potentially costly setback in the long-running saga over Swiss Franc mortgages after an adviser to the European Union’s top court said they can’t pass on extra fees to customers whose interest payments were deemed unfair, Bloomberg News reported. In cases where contested mortgage deals are voided by local courts, lenders can’t claim payments beyond reimbursements of the loan principal, Advocate General Anthony Collins of the EU Court of Justice said in a non-binding opinion Thursday.

Polish banks are sounding increasingly sanguine about a looming European Union court ruling that the country’s financial regulator once warned may spell a full-blown crisis for the industry, Bloomberg News reported. In the latest chapter of the saga centered around $17 billion of mainly Swiss franc-denominated loans, EU judges are set to rule whether banks can sue clients, who got their mortgage contracts canceled in courts — a way for the industry to recover some losses and deter future litigation.

Poland’s central bank left interest rates on hold for a fifth month as signs of a global disinflation strengthened the case for a dovish majority of policy makers, Bloomberg News reported. The Monetary Policy Council held its benchmark rate at 6.75%, matching the expectations of all 32 economists surveyed by Bloomberg. Governor Adam Glapinski has argued in the last few months against additional rate increases, warning that a deeper economic slowdown could trigger job cuts, which the monetary authority wants to avoid.

Polish rate-setter Ludwik Kotecki said on Wednesday that he sees scope for some small interest rates hikes this year but doesn't believe the Monetary Policy Council will decide to raise them, Reuters reported. "I would still see room for small interest rate hikes this year (...) but it probably won't happen. I just hope no one comes up with the idea of ​​lowering interest rates," Kotecki told website gazeta.pl.

Poland's Rafako said on Thursday that it was planning to file for bankruptcy, a day after Tauron demanded 1.3 billion zloty ($298 million) from a Rafako consortium that built a power plant the state-controlled utility says is faulty, Reuters reported. Rafako, which makes a wide range of boilers, disputes Tauron's claims for damages and fees, but is concerned they could impact its ability to conduct business operations and find an investor it is seeking, the company said in a statement.

Poland left borrowing costs unchanged as the threat of an economic recession overshadows concerns over the highest inflation in more than a quarter century, Bloomberg News reported. The country’s key interest rate was left on hold at 6.75% for the fourth consecutive month. Central bank Governor Adam Glapinski calmed an increasingly public dispute within the rate-setting Monetary Policy Council late last year as his warnings over excessive tightening dovetailed with signs that risks from inflation were subsiding as the peak neared.

The European Union will not pay out the vast majority of 75 billion euros ($73 billion) worth of development funds earmarked for Poland through 2027 unless Warsaw fixes the country's courts, a spokesman for the bloc's executive said on Monday, Reuters reported. Citing a flawed judiciary, the Brussels-based European Commission has already frozen some 35 billion euros assigned to Poland from a shared economic EU stimulus plan aimed at helping economies recover from the COVID-19 pandemic.

The National Bank of Poland (NBP) kept its main interest rate on hold at 6.75% on Wednesday, it said, opting to leave borrowing costs unchanged despite soaring inflation as it warned of an economic slowdown in the coming months, Reuters reported. With regional peers finishing monetary tightening cycles, Polish policymakers had also signaled that the end of rate hikes was near. However, with inflation rising to 17.2% in September, the highest since 1997, most economists had predicted that the cost of credit would continue to rise.