Polish President Flags Glapinski May Stay as Central Bank Chief
Polish President Flags Glapinski May Stay as Central Bank Chief
(Bloomberg) -- Poland’s president signaled he’s moving closer to reappointing the country’s central bank governor to a second six-year term, saying Tuesday that Adam Glapinski has “proved himself.”
The endorsement from Andrzej Duda comes a day after the country’s most powerful politician and the leader of the ruling party, Jaroslaw Kaczynski, expressed support for the embattled governor, saying he was convinced Glapinski should stay on for another six years.
Doubts over governor’s future have grown in recent months as inflation surged to the highest level in more than two decades and the central was criticized by the opposition for being late with interest rate increases.
“I think that Governor Glapinski proved himself well during the first term,” Duda said in an interview with Interia.pl. “He worked well.”
The decision on whether to reappoint Glapinski is still months away as his first term ends in June. In the meantime, surging inflation has become a major concern for Poles, chipping away at the public support for the ruling party.
Steep increases in electricity and gas prices planned from the beginning of 2022 could add to those worries. Rate hikes could also start to hit borrowers who took out mortgages when borrowing cost were still close to zero earlier this year.
The central bank raised the benchmark rate three times between October and December -- to 1.75% from a record-low 0.1%. It’s likely to lift rates again at a meeting on Jan. 4. Inflation surged to 7.8% in November and has stayed at a two-decade high for most of the year.
Glapinski continued to oppose rate increases through September, saying that inflation is only transitory and beyond the policy makers’ control. Kaczynski revealed on Monday that the government wanted the central bank to raise rates earlier and that there was a dispute between the two institutions.
At the same time, Kaczynski said that the timing of Polish rate increases was “probably right,” adding he’s convinced that Glapinski should remain for the second term, but deferred the decision to the president.
Duda will pick the candidate and at least 231 lawmakers in the 460-seat parliament will need to approve the choice by the middle of June.
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