Poland Monetary Policy February 2017

Poland

Poland: NBP holds reference rate despite higher price pressures

As anticipated by market analysts, the National Bank of Poland (NBP) decided to keep the reference rate at the record low of 1.50% at its 7–8 February monetary policy meeting. In addition, the Bank held its lombard rate at 2.50%, deposit rate at 0.50% and rediscount rate at 1.75%. The Bank has left the reference rate unchanged for nearly two years.

The NBP’s decision to leave rates unchanged comes despite a rise in inflationary pressures. Inflation rose sharply in December, largely due to a rise in commodities prices—which the Bank views as temporary. Excluding pressures from abroad, price dynamics in Poland remained contained due to low wage growth and moderate economic activity.

The Bank reiterated its wait-and-see stance in the statement, signaling a period of stable interest rates. The Bank emphasized that, “the current level of interest rates is conducive to keeping the Polish economy on the sustainable growth path and maintaining macroeconomic balance.”

Against this backdrop, the majority of our panelists expect the policy rate to end 2017 at the current level, with Consensus at 1.58%. For 2018, the panel sees the rate ending the year at 1.94%.


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Poland Monetary Policy Chart


Poland Monetary Policy February 2017

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


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