The Polish central bank has maintained its borrowing costs, resisting increasing calls to resume monetary easing.

The Monetary Policy Council held the benchmark rate steady at 5.75%, where it has been since October, matching the predictions of all 31 economists surveyed by Bloomberg.

This decision comes despite appeals from government officials to lower interest rates to stimulate economic growth and amid a trend of policy easing by other Eastern European central banks, Bloomberg reports.

Most members of the rate-setting panel anticipate that discussions about lowering rates will begin early next year, according to policymaker Ludwik Kotecki.

The 10-member Monetary Policy Council last reduced rates in October 2023, just before Poland's elections. Since then, Governor Adam Glapinski’s stance has shifted from dovish to more hawkish.

Despite this, Polish inflation has surged beyond the policymakers’ target range over the past two months, driven by rising energy prices following the government's reduction of expensive subsidies.

In the cabinet’s latest verbal intervention, Deputy Premier and Defence Minister Władysław Kosiniak-Kamysz stated on Wednesday that rates “should definitely be lowered in the nearest future.” 

Poland’s economy grew by 3.2% in Q2 compared to the same period last year, with the government aiming for nearly 4% growth in the coming year.

“We expect the governor’s tone after the September meeting to be somewhere between his hawkish tone from July and the dovish MPC majority, which we heard over the summer. Glapinski presumably does not want to be outvoted by the rest of the MPC,” ING Bank Slaski economists led by Rafal Benecki said in a note published ahead of the rates announcement.

Glapinski’s remarks will follow his attendance at the Federal Reserve’s symposium in Jackson Hole, where policymakers, including Fed Chairman Jerome Powell, indicated a move towards easing monetary policy.