National Bank of Poland: No Policy Change

April 6, 2016

Thirteen months have elapsed since the second of two 50-basis point cuts in the central bank’s reference interest rate, which has been at 1.5% and flanked by a 2.5% Lombard rate and a 0.5% deposit rate.  A sstatement released after this month’s meeting of the Monetary Council expresses satisfaction with the current stance, which “is conducive to keeping the Polish economy on the sustainable growth path and maintaining macroeconomic balance.”  Poland faces “no inflationary pressure.”  CPI inflation is negative, productive resources are under-utilized, wage growth is moderate, and expected inflation is “very low.”  But “persisting deflation has not adversely affected decisions of economic agents so far,” and domestic demand-led growth is being experienced at a decent enough pace.

Prior to the two rate cuts early last year, policy had been frozen for a year and a half.  Before that, a series of central bank rate reductions between November 2012 and July 2013 slashed the reference rate to 2.5% from 4.75%.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



Comments are closed.