WARSAW (Reuters) - Poland’s Monetary Policy Council (MPC) will hold a regular, non-policy monthly meeting on Tuesday with some analysts expecting it to cut interest rates in an emergency move to support the coronavirus-hit economy.
The Polish central bank takes rate-setting decisions at policy meetings at the beginning of the month. It also holds working meetings mid-month, when the rate-setting panel does not change rates normally.
On Tuesday it will hold a working sitting, but the extraordinary situation may require extraordinary steps, analysts said.
Central bank governor Adam Glapinski said last week he would propose an interest rate cut to support growth.
“It seems that the governor’s proposal may be supported by the majority of MPC members, maybe, as it has happened in other central banks, already at their one-day sitting on March 17,” PKO BP analysts wrote in a note on Monday.
“The central bank is likely to lower rates tomorrow... they can also lower their reserve requirement ratio. The central bank may offer commercial banks also a special credit line so they can offer loans to struggling companies,” said Jaroslaw Janecki, researcher at the Warsaw School of Economics.
The Polish zloty EURPLN= has slipped around 2% against the euro since Poland reported its first case of coronavirus on March 4. The Warsaw stock exchange’s main index .WIG20 has slumped around 33% during the same period.
The potential rate cut - if it happens - would underscore the gravity of the threat confronting the Polish economy. Rates in central Europe’s largest economy have been on hold since March 2015 and Glapinski had until recently repeatedly said that he expected no change in that stance until 2022.
The health ministry has registered 150 coronavirus cases and three deaths in Poland, which has a population of 38 million people. The ministry expects a steep rise in reported infections this week.
(This story corrects to make clear when the central bank takes its regular rate-setting decisions)
Reporting by Alicja Ptak, Pawel Florkiewicz with additional reporting by Anna Koper and Alan Charlish; Writing by Marcin Goclowski; Editing by Mark Heinrich