PKO BP: The application for a TS for the President of the NBP does not have a major impact on monetary policy (COMMENTARY)

Luc Williams

“Application for bringing the President of the NBP before the State Tribunal In our opinion, there is no clear impact on this monetary policy prospects. The procedure before the Constitutional Accountability Committee, which will examine the validity of the allegations, may last several to several months. Further steps may, in turn, be accompanied by significant legal controversies,” they informed PKO BP economists in publication.

Golden as litmus paper

During Tuesday's meeting with journalists Chief Economist of PKO BP Piotr Bujak he said that the market is looking at specific parameters and if the market expected that the suspension of the NBP president could force Monetary Policy Council discounts interest rates beyond what the economic situation justifies in the medium-term inflation perspective, it would probably react with weakening zloty. “As long as there is no question (…) about anything in the monetary or broader policy rate macroeconomic policy in Poland was to change, there is no particular reason to react,” Bujak said.

At the same time, the economist assessed that the situation surrounding the motion to bring the head of the NBP before the State Tribunal may slightly increase uncertainty as to how the Monetary Policy Council will behave.

Election of the Monetary Policy Council

“I personally had a belief, maybe not a deep one, until recently it seemed to me that the Council may become more hawkish in such a situation that the current majority may become stiffer. But when I listen to the voices of some members from this part of the Council, from this faction, I see openness to the prospect of adjusting the Monetary Policy Council's interest rates downwards,” Bujak said. He added that “it is difficult to draw any far-reaching conclusions.”

“We would rather emphasize that this may slightly increase uncertainty as to how the Council will behave and what will happen next, but we would not give directional indications that monetary policy will be more hawkish or dovish,” said the chief economist of PKO BP.

Application for the State Tribunal submitted

On Tuesday in the Sejm group of MPs she submitted preliminary motion to bring the President of the NBP, Adam Glapiński, before the State Tribunal. The motion was signed by 191 MPs.

In the preliminary motion to bring Glapiński before the Court of Justice, he is accused of violating the Constitution of the Republic of Poland and laws in connection with the position he holds or within the scope of his office. Eight charges are listed, including: indirect financing of the budget deficit through the purchase of State Treasury bonds and bonds guaranteed by the State Treasury, intervention in the currency market without proper authorization from the NBP management board, lowering interest rates before the parliamentary elections, politicizing the central bank or introducing quarterly rewards for itself.

author: Łukasz Pawłowski


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