National Bank of Poland

July 6, 2016

This week’s monetary policy review in Poland left the central bank reference interest rate at 1.50%, its level since a 50-basis point cut in March 2015.  There previously had been nine reductions engineered between November 2012 and January 2014 that cut the reference rate to 2.0% from 4.75%.  A statement released after this week’s two-day meeting was reasonably upbeat about current conditions surrounding economic growth but also asserted that the Brexit vote for Britain to leave the EU introduces a new risk factor and observes that CPI and PPI inflation are still negative amid a negative output gap.

In the Council’s assessment, the CPI growth will remain negative in the coming quarters due to the earlier substantial decline in the global commodity prices. At the same time, GDP growth is expected to remain stable in the coming quarters, following a temporary deceleration at the beginning of the year…   The downside risks to the global economic conditions, aggravated by the uncertainty about the effects of the UK’s EU referendum, and the volatility of commodity prices, remain the sources of uncertainty for the economy and the price developments.

That statement doesn’t address when or in what direction the reference rate is likely to change next.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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