Polish Central Bank Interest Rate Left at 2.5%

January 8, 2014

Poland’s seven-day repo rate was last cut in July 2013.  That reduction to a record low culminated 225 basis points of cuts in eight moves beginning with a 25-bp cut in November 2012.  Officials at Narodowy Bank Polski agreed as expected to retain the existing monetary policy stance following their first meeting of 2014.  Although a gradual GDP growth recovery is anticipated, officials observed limited improvement in the labor market and noted that inflation fell further to 0.6% in November from 0.8% in October.  Core inflation was lower, too.  Officials have an inflation target of 2.5%.  The forward guidance section of the latest policy statement reaffirms that a rate change before the middle of this year is doubtful.  As in Romania whose key central bank rate was reduced today, Poland continues to experience weak private credit expansion.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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