National Bank of Poland Keeps Existing Interest Rate Structures

September 4, 2013

The Policy Council of Narodowy Bank retained a 2.5% reference interest rate as widely expected and made no changes in its other central bank rates.  Inflation is running at only half the 2% target, and GDP doubled to 0.2% in the first quarter and doubled again to 0.4% in 2Q13.  On-year GDP growth was positive in the second quarter at 1.1%.  Economic recovery is being promoted by an accommodative monetary policy after 225 basis points of reduction in the National Bank’s reference rate squeezed into an eight-month interval between November 2012 and July 2013. Further loosening could risk excessive zloty depreciation given the prevailing vulnerability of many emerging market currencies, especially in cases like Poland where there is a sizable current account deficit.  Poland’s shortfall is roughly 2.5% of GDP.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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