March 25, 2020 / 6:59 AM / 12 days ago

Polish c.bank should not signal further rate cuts - c.banker Hartd

WARSAW, March 25 (Reuters) - Polish Monetary Policy Council should not signal the option of further rate cuts and the bank’s bond purchases and lower required reserve ratio have to be temporary, rate-setter Lukasz Hardt wrote in an article published in Rzeczpospolita daily.

Earlier this month the central bank cut its main interest rate by 50 basis points to a record low of 1.0% and proposed large-scale treasury bond purchases and long-term refinancing operations to combat the negative effects of coronavirus on the economy.

“Despite the extraordinary situation the foundations of Polish economy are strong, the banking system is very stable and safe and the public finance can handle even a significant growth of deficit,” Hardt said.

“The coronavirus pandemic will end at some point. From this perspective treasury bond purchases by the central bank have to be of temporary nature,” he also wrote. (Reporting by Agnieszka Barteczko Editing by Shri Navaratnam)

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