Poland: Central Bank leaves interest rates unchanged
November 23, 2010
At its latest monetary policy meeting held on 22-23 November, the Central Bank decided to keep interest rates unchanged at 3.50%, maintaining its monetary policy stance for the 17th consecutive month. According to the Central Bank, slowly recovering global economic growth and, in particular, a strong third quarter GDP in Germany, support the external sector of the Polish economy. The Central Bank maintains interest rates at record-low levels due to modest inflationary and wage pressures in the Polish economy. Furthermore, widespread expansionary monetary policy of major central banks around the world, the possibility of weakening economic growth in the United States and the debt crisis in the Euro area prevent the Polish Central Bank from raising interest rates. In the same meeting, the Monetary Policy Council (MPC) confirmed the inflation target for 2010 at 2.5% with a tolerance range of 1 percentage point. The next monetary policy meeting is set for 18-19 January 2011, when monetary authorities will review their projections for GDP and inflation. Most analysts expect the MPC to maintain its dovish position, as an interest rate hike could exert upward pressure on the zloty and thus hurt exports.