National Bank of Poland
July 2, 2014
It’s been a year since Poland’s key monetary policy interest rate was cut by 25 basis points to 2.5%, culminating 225 basis points of easing that began in November 2012. Monetary Policy Committee members again agreed to leave their stance as it is, but they released a dovish statement today that cites several indications that growth may have slowed, observes the wide gap between the 2.5% inflation target and the current level of 0.2%, flags the possibility of sub-zero inflation for a while, predicts an eventual gradual rise of inflation toward the vicinity of the target late in the policy time horizon, but also mentions persistent uncertainty regarding “the scale of further acceleration of economic growth and the prospects of inflation returning to the target.” Such a comment means that one shouldn’t rule out the possibility of a further cut in central bank interest rates and that at the very least rates will not be raised for considerable time further. Polish officials met just a day before ECB President Draghi’s press conference and the release of U.S. jobs statistics.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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