Polish Central Bank Leaves Markets Guessing During a Pandemic

(Bloomberg) -- Poland’s central bank still seems on a crisis footing, even as it declares the economic storm triggered by Covid-19 is “behind us.”

The onset of the virus in the spring prompted the cancellation of the regular news conferences that usually follow interest-rate decisions across the continent. But unlike most of its European peers, the National Bank of Poland hasn’t returned to answering questions -- not even virtually.

The bank has given no reason for the change in communication, with the Polish government having resumed press events in person in June. While analysts comb comments made by policy makers -- including Governor Adam Glapinski’s article published Friday -- for insight, it’s clear that access and transparency has declined as economic risks surged.

Analysts complain that the information lull comes amid a barrage of unprecedented central bank actions -- including slashing borrowing costs to near zero and rolling out one of the biggest quantitative-easing programs among developing nations.

What’s more, they’re baffled by the wording of the statement that follows rate announcements, which has barely changed in months despite the shifting path of the pandemic.

The regular statements and minutes from monetary-policy meetings are “far from sufficient,” said Piotr Matys, an emerging-market strategist at Rabobank in London. “One can’t really comprehend why the central bank has failed to resume its press conferences.”

Even Turkey, which according to Matys is in a “much more difficult position when it comes to uncomfortable questions,” has held video conferences in recent months, providing investors with direct access.

Poland’s central bank didn’t respond to questions from Bloomberg on why it’s stopped organizing meetings with journalists. It only announced its decision not to hold a news conference this week a day before its policy meeting.

Meanwhile, questions are stacking up.

For one, the bank unexpectedly broke one of its own protocol in June by starting to comment on the zloty, which it says should be weaker against the euro to ease the exit from recession. The currency went on to rally in July and August.

Other issues include the eventual size and duration of the bond-buying program, what the European Central Bank said when Poland asked in March about using other unconventional policy tools, and how local lenders and consumers are adapting to what increasingly looks like a prolonged period of negative real interest rates.

Then there are inquiries that could shine some light on the extent that rekindling growth -- not maintaining price stability -- has become the main yardstick for decisions.

Without news conferences, “the assessment of monetary-policy perspectives remains difficult,” said Grzegorz Maliszewski, chief economist at Bank Millennium SA in Warsaw.

Analysts and investors rely on comments from regular interviews with Polish Monetary Policy Council members. Even Glapinski, the influential chairman of the 10-strong panel who usually only speaks publicly during the monthly news conferences, last week told ISBnews during an event in southern Poland that “rates are at the right level.”

In his article published by newspaper Dziennik Gazeta Prawna on Friday, he wrote why central bank policy must remain “accommodative.”

Glapinski’s predecessor, Marek Belka warned the central bank on its communication after it wrong-footed investors with a rate cut in May.

“Surprising the market doesn’t help anyone,” said Belka, who’s now a lawmaker in the European Parliament. “Holding press conferences, commenting on policy, is the central bank’s duty -- not some kind of favor by policy makers.”

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