Women's Day: How women in the MPC vote on rate hikes

The Monetary Policy Council did not raise interest rates at its sixth consecutive meeting. On the occasion of Women's Day, it is worth noting that there are only three women in the ten-member MPC. Research shows that in Poland they are more afraid of inflation than men.

Interest rates unchanged

The Monetary Policy Council has recently become out of practice in raising interest rates. The last increase took place at the meeting in September 2022. Then the hikes were stopped pending a drop in inflation. It happened at the end of the year, but, as expected, inflation picked up again in the New Year. Also in February, we expect inflation to rise to 18,5-19 percent, but then it should start to fall. The current meeting took place before the release of inflation data for February, which made it easier for the Council to decide not to raise interest rates.

Another element that worries the Council may be the data coming from Europe on a slower decline in inflation in other countries, which may indicate that we will face a similar scenario in Poland. And also announcements of representatives FEDthat interest rates in the US will increase more than we previously expected, and the hike cycle will last longer. However, this is definitely not enough for the MPC to decide on a rate hike.

Nor should we overlook the fact that central banks in countries where large numbers of citizens have variable-rate mortgages are more cautious about raising interest rates.

Women in the MPC are a minority

On Women's Day, it is worth noting that there are only 10 women out of 3 MPC members. In the entire Polish society, there are 100 women per 107 men (in cities - 111, in rural areas - 101). If this parity were transferred to the MPC, there should be 5 women in it. Interestingly, the decision to raise interest rates in 2022 was made only by men, because in the period from February to September 2022 in RPP there wasn't a single woman. The current members joined its roster in September and October 2022.

Według eToro Individual Investor Pulse research, Polish female investors are much more afraid of the risk of inflation than men (30% vs. 25%), as well as the risk of international conflict (19% vs. 15%). However, they are less worried about the state of the national (9% vs 14%) and global (11% vs 15%) economy.

This would suggest that women could prioritize the fight against inflation and give second priority to the prospects for economic growth. An example of such a phenomenon is how Joanna Tyrowicz votes in the MPC, who can be hailed as the Polish equivalent of Jerome Powell. The minutes of the Council show that she is the most hawkish of its members, regularly submitting a motion for a 1pp rate hike at each meeting (minutes of voting from meetings until January 2023 have been published).

However, since there are a minority of women in the MPC, it can be concluded that monetary policy in Poland is largely shaped by men.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.