Polish Reference Central Bank Rate To Remain at 3.5%

August 26, 2009

As in many countries, Polish monetary policy is on hold after being eased quite substantially earlier.  The Narodowy Bank Polski made no change in key interest rates for the third consecutive monthly meeting.  No move was expected.  There were six cuts between late November and late June, one each of 75 basis points in December and again in January and the other four by 25 basis points.  A statement from central bank officials called domestic economic activity subdued and spoke of the difficulty of assessing how enduring improved global conditions will be in light of financial sector problems that have not fully disappeared.  However, CPI inflation of 3.6% in the year to July was higher than in June, above the target ceiling and likely to stay elevated in the short term.  That downward stickiness has not changed the belief by officials that medium-term inflation is more likely to run under than over target.  Officials would like to see Poland join the euro area, and sooner is better than later.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.


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