Poland, which unexpectedly held off cutting rates for the first time since 2009 last week, may refrain again next month as policy makers need to see sustained disinflation, central banker Anna Zielinska-Glebocka said.

“A cut next month isn’t set” as “the economic slowdown has failed to contain inflation noticeably so far,” she said in a phone interview on Oct. 6. “We need to see how strong the anti-inflation impulse is. I support a deliberate policy, refraining from radical and sudden changes.”

Zielinska-Glebocka was among eight policy makers on the 10- member Monetary Policy Council who voted for a quarter-rate increase in May. The decision made Poland’s central bank the only one in EU to raise borrowing costs this year. Since then, Poland’s economy has slowed and pressure is growing for the MPC to shift its focus to growth from inflation.

Poland’s inflation rate, the EU’s second-highest, will remain above the central bank’s 2.5 percent target until early next year, based on projections published by the bank in July. That would extend the rate’s stay above policy makers’ target range for two years. Consumer-price growth rebounded in September after slowing to 3.8 percent in August, Zielinska said. Last month’s price data will be released on Oct. 15.

Next Move

The zloty was little changed today at 4.079 per euro at 2:05 p.m. in Warsaw. The five-year government bond yield fell 1 basis point to 4.17 percent.

The MPC will make its next rate decision on Nov. 7 after examining new inflation and economic-growth projections for 2012-2014, prepared by the central bank’s Economic Institute.

“The September data won’t matter for our rate decision because it will be the November projection that shows at what rate inflationary pressure will ease,” Zielinska said. “One has to keep in mind though that a rate cut isn’t an obvious growth stimulus in Poland. We must also take care to maintain positive real interest rates as long as economic conditions allow.”

Expansion in the EU’s largest eastern economy slowed to 2.4 percent from a year earlier in the second quarter, the lowest growth rate since 2009. The government is sticking to its 2.5 percent growth forecast for 2012, while trimming next year’s gross domestic product forecast to 2.2 percent, from its earlier plan of 2.7 percent.

The European Central Bank forecasts a 0.4 contraction this year for the euro-area economy, the main market for Polish exports. The 17-nation region’s jobless rate rose to 11.4 percent last month, the highest since the data began in 1995.

Persuading Hawks

“The November projection will, in our opinion, bring a lower trajectory for GDP and for inflation, with CPI averaging near the bank’s target in 2013 and GDP below 2 percent,” Marcin Mrowiec, chief economist at Bank Pekao in Warsaw, said in an e- mailed note. “Such a set of data will persuade hawkish members of the council to cut rates in November.”

MPC member Adam Glapinski, who backed the May rate increase and last month said rates should be kept on hold until next year, said today in an interview with PAP newswire that he isn’t “absolutely against” cutting borrowing costs in November if the bank’s projections show a “serious” economic slowdown next year and no threat to its inflation target.

Poland has held off lowering borrowing costs even as policy makers across the region cut them amid a recession. Last month, the Czech central bank reduced interest rates to a record-low 0.25 percent, while Hungary lowered its two-week deposit rate to 6.5 percent, its second cut in two months.

Sharp Slowdown

Zielinska said she doesn’t expect Poland will slip into a recession. “The slowdown may be sharp, though, and if it produces sustained disinflation, that might prompt policy makers to consider some moderate rate cuts,” she said.

Forward-rate agreements, used to speculate on interest rate levels, were 79 basis points below the Warsaw Interbank Offered rate, signaling bets on three quarter-point rate cuts over the next six months, data compiled by Bloomberg show.

Rate decisions take as many as six quarters to fully affect the economy, according the central bank estimates.

Elzbieta Chojna-Duch, one of two MPC members who opposed the May rate increase in May and has called for reversing it, said the central bank should consider a series of rate cuts after making an initial “radical reduction,” according to comments broadcast by TVN CNBC today. The slowing economy will temper inflation pressures, she said.

“Today’s plethora of comments show just how heterogeneous the MPC is,” Gabor Ambrus, a London-based economist at 4CAST Ltd., said in a report today. “We still see a cut in November as very likely.”

Bloomberg