Adam Glapiński made the statement at a news conference on Thursday, Polish state news agency PAP reported.
A day earlier, the rate-setting Council left interest rates unchanged, keeping the reference rate at 6.75 percent.
Over the past year, the panel had delivered a string of 11 consecutive rate hikes in an effort to contain surging consumer prices.
Most economists had expected interest rates to be raised by a further 25 basis points on Wednesday, the alebank.pl website reported.
‘Tightening cycle still open’
Commenting on the decision, Glapiński told reporters on Thursday: “The Monetary Policy Council hasn’t decided to end the cycle of interest rate hikes. The cycle is still formally open.”
“It’s a classic case of ‘wait and see,’” he added.
Glapiński went on to say: “We are watching the situation. In particular we are watching how the situation develops until November. By then there will be another report on inflation, which for the NBP, for all observers, is the most important document, providing the best basis for looking at the coming quarters.”
He added: “We’re not saying we’ve stopped raising interest rates. We’ve merely halted the cycle. Incoming data may be such that the cycle of interest rate hikes will be closed, but now is not yet the time to do this.”
‘Inflation will gradually fall’
According to the NBP chief, “the Council’s very strong tightening of monetary policy, with 11 consecutive hikes,” coupled with “coordinated interest rate increases by all central banks,” will bring about “a gradual fall in inflation in our country.”
Glapiński added that "in the interests of reducing inflation, it would be best if next year the government’s anti-inflation measures and regulated prices were kept in check, then inflation will fall fast."
He said next year inflation would “gradually fall in the direction of the NBP’s target rate.”
Shocks 'diminishing,' economic downturn to reduce inflation
The central bank chief also stated: “signs are slowly emerging that the scale of the shocks that had fueled inflation is gradually diminishing.”
He added that “the main factors driving inflation are the raw material shocks, especially shocks in energy commodities.”
Meanwhile, “the expected economic slowdown should be strong enough to subdue demand pressures and therefore inflation,” Glapiński said.
He also expressed his conviction that, despite the economic slowdown, “the threat of a significant uptick in unemployment and recession is very low,” the PAP news agency reported.
Prime Minister Mateusz Morawiecki said last October that he expected “an appropriate response” from the central bank to the fastest price growth in the country in 20 years.
Inflation in Poland hit 17.2 percent last month, according to a flash estimate by the country’s statistics office.
(pm/gs)
Source: PAP, businessinsider.pl, alebank.pl