Poland Monetary Policy June 2016


Poland: NBP leaves reference rate at record low

June 8, 2016

Amid a lack of inflationary pressure in the economy, the National Bank of Poland (NBP) decided to keep its reference rate at the record low of 1.50% at its 7–8 June monetary policy meeting. The Bank has left the rate unchanged for over a year and June’s decision matched market analysts’ expectations. The decision comes despite large changes to the monetary policy council—the majority of the 10 members have been replaced since the start of the year—and against a backdrop of monetary easing in the region. This meeting represented the final monetary policy meeting for Central Bank Governor Marek Belka, who will be replaced by Adam Glapinski this month.

In its accompanying statement, the NBP outlined that the decisions come on the back of moderate global growth and weak conditions in emerging economies. The Bank pointed out that subdued growth along with low prices for commodities have limited price pressures globally and have even led to falling prices in certain regions. As a result, the European Central Bank (ECB) is holding interest rates at very low levels and is purchasing financial assets. Regarding Poland, the NBP commented that growth slowed in Q1, largely due to a fall in investment. However, household demand remains stable and should improve in the coming quarters. The Bank added that consumer prices are lingering in negative territory, mainly due to external factors, but the Bank does not see this adversely affecting the economy. Looking forward, the Bank sees prices remaining negative, but it expects stable growth to continue despite Q1’s deceleration and therefore decided to hold the policy rate.

Against this backdrop, FocusEconomics Consensus Forecast panelists expect the policy rate to end 2016 at 1.40%. For 2017, the panel sees the rate ending the year at 1.78%.

Author: Angela Bouzanis, Lead Economist

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Poland Monetary Policy Chart

Poland Monetary Policy June 2016

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

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