Ludwik Kotecki and Przemysław Litwiniuk will become new members of the Monetary Policy Council. The Senate voted on their candidacy on Wednesday. The MPC makes decisions, inter alia, on the level of interest rates, which has an impact on loan installments.
Earlier, Ludwik Kotecki and Przemysław Litwiniuk received a recommendation from the Senate’s Public Finance Committee and the budget for members of the Monetary Policy Council. The final decision, however, rested with the Senate. In the MPC they will replace Eugeniusz Gatnar and Jerzy Kropiwnicki, whose terms of office expire on 25 January.
Kotecki received 51 for, 41 against, 5 abstentions, and Litwiniuk – 59 for, 3 against and 36 abstentions.
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Interest rates in Poland
Last week, the Senate committee heard both candidates. – The Monetary Policy Council is to be responsible for price stability in Poland. Recently, it has been shaken and the new MPC that will be formed will have the important task of bringing inflation back to the inflation target, which is 2.5 percent (+/- 1 percent – ed.) – said Ludwik Kotecki during the session of the Senate committee .
Meanwhile, the preliminary data of the Central Statistical Office shows that the prices of consumer goods and services in December 2021 increased by 8.6%. Every year. Due to the high level of inflation, the MPC decided to raise interest rates four times. In October 2021, the main central bank rate increased from 0.1 to 0.5 percent. It was the first increase since May 2012. In November, the main interest rate increased by 75 basis points and in December by 50 basis points.
During the last meeting in January, the Council decided to raise the NBP interest rates once again by 50 basis points. As a result, the main benchmark interest rate is at 2.25 percent. This is the highest level since August 2014.
President of the National Bank of Poland and at the same time the chairman of the MPC, Adam Glapiński, said during last week’s press conference – which took place before the announcement of preliminary inflation data in December – that taking into account the current forecasts of the development of the situation, he will urge the Council to raise interest rates one more time, at least by 50 basis points.
The next MPC decision-making meeting is scheduled for February 8. This means that Ludwik Kotecki and Przemysław Litwiniuk will take part in the meeting.
Who are Ludwik Kotecki and Przemysław Litwiniuk?
Ludwik Kotecki worked in the Ministry of Finance in 1996-2015. He was there, among others, minister’s adviser, director of the Department of Analyzes (2000-2008) and deputy minister of finance (2008-2012). In the years 2012-2015 he was the Chief Economist of the Ministry of Finance. As Kotecki said during the session of the Senate committee, as Chief Economist of the Ministry of Finance and director of the Department of Analyzes, he was responsible for the macroeconomic assumptions for the draft state budgets. Kotecki was a member of the Polish Financial Supervision Authority in 2012-2015. In 2015-2016, he worked in the International Monetary Fund, and after returning to Poland, he worked, among others as an independent expert. Since 2019, he has been an advisor to the Marshal of the Senate for economic matters.
Przemysław Litwiniuk, in turn, is an assistant professor at the Institute of Economics and Finance at the Department of Finance at the Warsaw University of Life Sciences. He graduated from the Warsaw School of Economics and the University of Warsaw, completed his doctorate at the University of Warsaw, and obtained his postdoctoral degree at the University of Adam Mickiewicz in Poznań. Litwiniuk is also a legal advisor, and also works in the local government – previously at the poviat level as a councilor of the Biała poviat. Currently, he is a councilor of the Lublin voivodship sejmik.
– Monetary policy is not a separate policy, it is not only a policy conducted by the central bank. I am a supporter of the independence of the MPC and the NBP in functional, not dogmatic terms. I can describe myself as a supporter of the fiscal monetary policy mix, i.e. the tightened cooperation of the NBP with the Council of Ministers and other entities that may shape the economic situation in Poland. I mean specialized bodies, such as the PFSA, but also EU bodies, because in today’s world, price stability instruments are not uniform in nature. I adhere to the principle of cooperation between the authorities, said Przemysław Litwiniuk.
Monetary Policy Council – composition
The Monetary Policy Council – in accordance with the regulations – is a body of the National Bank of Poland. The Council consists of: the President of the National Bank of Poland, appointed by the Sejm at the request of the President of the Republic of Poland, and nine members. Three are appointed by the Seym, three by the Senate, and three are appointed by the President of the Republic of Poland. The president of the NBP is also the chairman of the MPC.
The terms of office of two MPC members nominated by the Senate – Eugeniusz Gatnar and Jerzy Kropiwnicki – end on 25 January. The term of office of the third, i.e. Rafał Sura, expires on November 16, 2022. The terms of office of three MPC members appointed by the Sejm will also expire this year. The terms of office of Grażyna Ancyparowicz and Eryk Łon will expire on February 9, and Jerzy Żyżyński – on March 30.
Also, two members of the MPC indicated by the president will finish their work this year. It is about Łukasz Hardt and Kamil Zubelewicz, whose terms of office expire on February 20. Only the term of office of the third “presidential” MPC member, Cezary Kochalski, ends on December 21, 2025.
In 2022, the term of office of the President of the National Bank of Poland, Adam Glapiński, ends. He assumed the office of the president of the central bank on June 21, 2016 after the swearing-in by the Sejm, and the term of office of the NBP president is six years. However, while one can only be a member of the MPC for one term, in the case of the NBP president, two terms are possible.
Main photo source: PAP / Leszek Szymański