Poland Monetary Policy September 2016


Poland: NBP holds reference rate at record low as expected

September 7, 2016

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 6–7 September monetary policy meeting. The Bank has left the rate unchanged for over a year. In addition, the Bank held its lombard rate at 2.50%, deposit rate at 0.50% and rediscount rate at 1.75%.

In the accompanying statement, the NBP outlined that interest rates were left steady to maintain a macroeconomic balance and steady growth rate in the Polish economy. The Bank stated that although it expects consumer prices to linger in negative territory in the short term, this has not adversely affected the economy so far. In addition, the Bank sees inflationary pressures returning going forward, as the effects of low commodity prices dissipate, and GDP growth remaining steady supported by higher wages and child benefits.

Governor Adam Glapinski struck a hawkish tone in the accompanying conference, raising the possibility of hiking rates by the end of next year. This comes in spite of weak economic growth in the first half of the year and missed inflation targets.

Against this backdrop, FocusEconomics Consensus Forecast panelists expect the policy rate to end 2016 at 1.46%. For 2017, the panel sees the rate ending the year at 1.60%.

Author: Angela Bouzanis, Senior Economist

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Poland Monetary Policy Chart

Poland Monetary Policy September 2016 0

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

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