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The Warsaw Voice » Business » August 16, 2018
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Rate setter wants rate cuts
August 16, 2018   
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Eryk Lon
Rate setter Eryk Lon, the most dovish Poland's MPC member by rhetoric, is mulling his options for filing a motion for a rate cut this year, but still see rate stability as the most likely option, Lon said in a set of comments sent to PAP.
"I still don't know if I will file a motion for a rate cut this year," Lon said. There are arguments in favor of doing that. However, there are also reasons that incline me to give up on filing such motion. Everything is possible."
A recent IMF's downgrade for euro zone's growth outlook could provide an argument for a rate cut, as "the euro zone is our important trade partner," Lon noted.
However, as the scale of those outlook cuts was not significant, rate stability in Poland remains the most likely scenario, the rate setter noted.
"We have top note, though, that the scale of cuts to forecast rate of economic growth was not significant," he said. "Because of that, the scenario of leaving interest rates intact remains most likely for now."
An interest rate hike is not needed at all and even a discussion of hiking rates could hurt investments, Lon warned.
"I would like to markedly stress that I see no reason to hike interest rates," the rate setter said.
"It's worth noticing, for example, that we still have a low share of investment outlays in GDP and I'm afraid that hiking interest rates or even signaling such hikes could negatively impact future growth rates of investment outlays," he said.
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