Polish central bank governor Adam Glapinski said on Thursday that this week’s 25-basis-point interest rate cut is not the beginning of a broader easing cycle, though he did not dismiss the possibility of another cut in September.

The central bank surprised markets on Wednesday by lowering its benchmark rate to 5%, pointing to an anticipated significant drop in inflation in the near term.

Glapinski underscored that the bank is not committing to a specific trajectory for future interest rates

“Further decisions will depend on incoming information, we are not announcing a path of rate cuts, this is not the beginning of a cycle,” Glapinski commented when questioned as to the likelihood of another rate cut in September on positive data.

“We are not closed to any decisions,” he went on to say.

Furthermore, Poland’s statistical office reported this week that annual inflation rose to 4.1% in June, slightly above the 4.0% forecast in a Reuters poll and up from a revised 4.0% in May. This remains above the central bank’s inflation target range of 1.5% to 3.5%.

On Wednesday, the central bank also released updated forecasts for inflation and economic growth, showing that price increases are now expected to be slower than projected in its March outlook.

Glapinski said he expects inflation to drop within the central bank’s target range as early as this month, Reuters reports.

“If inflation stays at 2.5%, interest rates will also go down to a similar level, but these are not high rates. We rather try to maintain rates so that they have an anti-inflationary effect, but are not excessively high and do not stifle the economy,” he told reporters.

In addition, Glapinski also noted that while inflation might edge up in the coming quarters, it is expected to remain within the central bank’s target range over the medium term. He added that the outlook for household energy prices in the second half of the year remains uncertain.

Despite the governor’s relatively hawkish tone in describing Poland’s economic conditions, analysts still anticipate further interest rate cuts.

“The MPC’s communication is unfortunately not very transparent. To sum up, inflation will fall to target in the second half of 2025, and rate cuts will be larger than the first part of the conference might have suggested,” according to ING economists.