Further Monetary Easing Not Taken in Poland But Remains a Future Possibility

December 3, 2014

In the opinion of the Council, the October adjustment of monetary policy and the stable, despite some slowdown, economic growth limit the risk of inflation remaining below the target in the medium term. Therefore, the Council decided to keep the NBP interest rates unchanged. However, the Council highlights that uncertainty regarding the economic conditions in the environment of the Polish economy persists. If the incoming data confirm a slowdown in economic activity, and weak growth in the environment of the Polish economy persists, the Council does not rule out further adjustment of monetary policy.

Before October’s 50-basis point reduction to a record low of 2.0%, monetary easing had paused for fifteen months following 225 basis points of cuts in the reference seven-day repo rate between November 2012 and July 2013.  The statement accompanying today’s decision speaks of expansionary monetary policies in many other countries, slower Polish growth last quarter, stable bank lending, limited domestic wage pressure, a lack of demand pressure, and very low inflation expectations.

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

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