Central bank head stays calm about inflation

There are no indications of an inflation rise, National Bank of Poland (NBP) head Adam Glapiński said on Friday responding to rumours of an inflation outbreak in Poland.

During the online conference, Mr Glapiński said that forecasts saw a further decline in base inflation.

"I fail to understand the reasons for the concern some commentators show about an alleged inflation rise," he stated.

"Base inflation has declined significantly and the forecasts we have indicate that the trend will continue this year," Mr Glapiński said, despite announcing PLN 1000 notes being put into circulation.

He stated that from February 2017 to the end of 2020, NBP introduced 46.5 million PLN 500 notes into circulation. Consequently it was possible to cover the banks' needs for cash withdrawals, which were made more often by customers, afraid of COVID-19 economic consequences.

At the same time Adam Glapiński assured that there would be no shortage of cash.

"We have a huge reservoir of cash in all denominations and we will serve all people who want to withdraw cash from the bank”, he noted.

The NBP head pointed out there was "no chance" of the NBP raising interest rates in the coming two years, the remainder of the Monetary Policy Council's current term. He added that negative rates were possible if needed, but stressed that further rate cuts would be considered only in the face of a "radical deterioration" in the current conditions.

According to the Central Statistical Office, inflation in December stood at 2.3 percent.