WARSAW (Reuters) -Poland could raise interest rates by 200 to 400 basis points more, central banker Joanna Tyrowicz was quoted as saying on Friday, striking a hawkish tone at a time when many economists say the tightening cycle is nearing its end.
Polish rate-setters are weighing inflation that has surged to its highest level in a quarter of a century against an economic slowdown that has prompted some policymakers to say the scope for further hikes is limited.
“We are talking about raising the interest rate by 2-3 (percentage points), potentially by 4 pps at most… after assessing the scope of effectiveness of the earlier hikes,” Tyrowicz was quoted as saying by state-run news agency PAP.
In September Poland’s central bank raised its main interest rate by 25 basis points to 6.75%.
However, Tyrowicz said that Poland may need a more “radical” approach.
“Continuing with 25-basis-point hikes at the subsequent sittings would not be a reasonable strategy,” she said.
Nevertheless, she said that the need for higher borrowing costs did not necessarily mean rates had to rise in October.
“There is no doubt that rates have to be raised, (but) whether they have to be raised at the next sitting is a completely different issue,” she said.