Poland Monetary Policy

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Poland: NBP keeps reference rate unchanged for the fourth consecutive month

February 4, 2015

The National Bank of Poland (NBP) kept its reference rate unchanged at 2.00% for the fourth consecutive month at its 3–4 February monetary policy meeting. The decision was in line with market expectations.

In its accompanying statement, the NBP mentioned that the global economy continues to grow moderately. According to the Bank, the U.S. economy is continuing to recover at a solid pace and the outlook appears to be positive. In contrast, economic activity in the Euro area, Poland’s main trading partner, remains weak and recent data suggest that there will be a meager recovery in the first months of 2015. Growth in large emerging market economies, such as China and Russia, is also sluggish compared to previous years. On the domestic front, the NBP noted that, “GDP growth decreased slightly in 2014 Q4, remaining above 3%. Stable growth in consumption was accompanied by some weakening in investment growth. At the same time, imports growth slowed down more than that of exports, thus reducing the negative contribution of net exports to GDP growth.”

The Bank also commented on the recent appreciation of the Swiss franc. The NBP noted that lending to households continues to grow at a steady rate. Nonetheless, “the sharp appreciation of the Swiss franc has increased the indebtedness of households with liabilities in this currency, which may limit their consumption.”

Regarding inflation, the Bank stated that consumer prices fell 1.0% annually in December. According to the Bank, the decline in consumer prices reflected both lackluster domestic demand as well as low global oil prices. The NBP pointed out that the sharp decline in for the price of oil has been conducive to inflation staying at very low levels in many countries. This has prompted major central banks to keep interest rates at multi-year lows.

The Bank decided to keep its reference rate unchanged at 2.00% for the fourth consecutive month after cutting it by 50 percentage points at its October meeting last year. Nevertheless, the Committee stated that, “the Council does not rule out a monetary policy adjustment in the nearest future, should the expected period of deflation be extended, which would increase the risk of inflation remaining below the target in the medium term.”

FocusEconomics Consensus Forecast panelists expect the policy rate to end 2015 at 1.82%. For 2016, the panel sees the rate ending the year at 1.97%.


Author:, Economist

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Poland Monetary Policy February 2015

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


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