Polish Monetary Authorities Serve Notice of Possible Near-Term Rate Increase

April 4, 2012

A statement from the National Bank of Poland following this week’s monthly meeting of policymakers concludes

The Council decided to keep the NBP interest rates unchanged. In the opinion of the Council, the expected mild economic slowdown in Poland over the monetary policy horizon increases the probability of inflation remaining above the target in the medium term. Given the above, the Council will consider tightening of monetary policy in the nearest future, unless signs of considerable economic weakening in Poland appear and the outlook for inflation returning to the target fail to improve.

The policy reference rate will continue at 4.5%, its level since a 25-basis point hike on June 8, 2011, which had been preceded by similar hikes last year in January, April and May from an alltime low of 3.5%.  During the Great Recession, the rate was cut from 6.0% prior to November 2008 to 3.5% in June 2009. 

Polish headline and core inflation both rose in February, with the former’s 4.3% 12-month rate of increase exceeding its target midpoint by 1.8 percentage points and target ceiling by 0.8 percentage points.  Economic growth averaged 4.1% per year in 2010 and 2011, and commodity prices continue to be elevated.

Next month’s policy statement is scheduled for May 9.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



Comments are closed.