Poland: Central Bank leaves rate unchanged
January 8, 2014
The National Bank of Poland (NBP) kept its reference rate unchanged at 2.50% for a fourth consecutive time at its 7-8 January monetary policy meeting. The decision was in line with market expectations and coincides with the announcement that the Bank made at its July meeting confirming the end of the monetary policy loosening cycle that began last November. The Bank noted that recent global indicators show that, "moderate growth in global economic activity is conducive to inflation staying low in many countries," going forward. The NBP indicated that inflation fell from 0.8% in October to 0.6% in November and therefore remains well below its target of 2.5% plus/minus 1.0 percentage points. Although, "recovery is likely to continue in the coming quarters," the NBP stated that, "inflationary pressures will remain subdued." As a result, the Bank restated that interest rates should be kept unchanged, "at least until the end of the first half of 2014." For 2014, panelists expect the policy rate to end the year at 2.90%. For 2015, the panel sees the rate ending the year at 3.64%.
Author: Carl Kelly, Economist