Poland Monetary Policy


Central Bank leaves rate unchanged at historic low

The National Bank of Poland (NBP) kept its reference rate unchanged at 2.50% at its 8-9 April monetary policy meeting. The decision was in line with market expectations and marked the ninth consecutive meeting in which no change was made. The Bank emphasized that keeping interest rates at the current low level supports ongoing domestic economic growth and a return of inflation to the established target.

The Bank noted that the global economy continues to grow at a moderate pace. It pointed out that conditions remain favorable in the U.S., while recovery has been slow and limited in the Euro area and China is showing signs of weakening. In terms of the domestic economy, the Bank emphasized that the gradual recovery is continuing; including accelerations in industrial output, retail sales and construction activity in the first months of the year. Moreover, while the recovery is driving continued improvements in the labor market, unemployment remains elevated.

Regarding price developments, the Bank stated that inflation stood at 0.7% in February, which is well below its target of 2.5% plus/minus 1.0 percentage points. Moreover, the Bank explained that, even though, “gradual recovery is likely to continue in the coming quarters, inflationary pressures will remain subdued.” As a result, the Bank decided to keep interest rates unchanged. Moreover, it reiterated that the period during which rates should be kept unchanged is, “at least until the end of the third quarter of 2014.”

For 2014, panelists expect the policy rate to end the year at 2.85%. For 2015, the panel sees the rate ending the year at 3.52%.

Author:, Economist

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Poland Monetary Policy Chart

Poland Monetary Policy April 2014

Note: NBP Reference Rate in %.
Source: National Bank of Poland (NBP).

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