National Bank of Poland: A Pause in Rate Cuts but a Dovish Statement

April 10, 2013

The Monetary Policy Council left the record low 3.25% reference interest rate unchanged this month after four consecutive 25-basis point reductions in November-February followed by a 50-bp cut in March.  A statement was released that noted continuing weak growth in early 2013 reflected in falling industrial production, subdued credit expansion, and just marginally firmer retail sales.  It was also observed that 1.3% on-year CPI inflation in February was “markedly” below the 2.5% target.  Expected inflation has slipped, and weak wage growth, a soft business climate, and moderate growth should constrain pressure on prices going forward.  Interest rate decisions at future monthly meetings will be driven by observed economic trends.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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