Poland Monetary Policy


Poland: Central Bank leaves interest rates unchanged

November 9, 2011

At its 8-9 November monetary policy meeting, the Central Bank left interest rates unchanged at 4.50% for a fifth consecutive month, in a move that was widely expected by the market. Interest rates have thus remained unchanged since June, when the Bank had raised rates by 25 basis points. The decision of the National Bank of Poland (NBP) came as advanced economies struggle to revive growth and the financial markets remain turbulent. The Central Bank stressed that ?in the medium term inflation will be curbed by somewhat lower domestic economic growth amidst fiscal tightening, including reduced public investment spending, and interest rate increases implemented in the first half of 2011, as well as the expected global economic slowdown.? Although inflation decreased in September to 3.9%, it remains above the Central Bank's inflation target of 2.5% with a tolerance margin of 1.0 percentage points. The NBP expects inflationary pressures to moderate at the beginning of 2012, as the effect of VAT rate increases, as well as food and energy price rises in the first half of 2011, gradually abates.


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