Polish Monetary Tightening Paused

September 8, 2011

On September 7, the Narodowy Bank left its key reference rate at 4.5% and released a statement indicating that four rate hikes earlier this year should be sufficient to return inflation to target of 2.5% in the medium term.  July on-year inflation was 4.1%.  Rate cuts between November 2008 and June 2009 totaled 350 basis points, but hikes of 25 basis points each were implemented in January, April, May and June.  The statement is upbeat about Polish growth and does not hint that a cut of rates might be considered.  On the contrary, it explicitly states that, “the Council does not rule out the possibility of further monetary policy adjustment, should the outlook for inflation returning to the target deteriorate.”

Copyright 2011, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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