Poland: Central Bank leaves rates unchanged defying expectations
October 3, 2012
At its 2-3 October monetary policy meeting, the National Bank of Poland (NBP) left its reference rate unchanged at 4.75% for the second consecutive month. The move surprised market analysts, which had expected a rate cut of 25 basis points. The Central Bank confirmed that global economic activity is weak, reflecting the recession in the Euro area, moderate growth in the United States as well as a slowdown among various emerging economies. On the domestic side, the Bank reiterated that that growth is decelerating, which has been confirmed by recent economic data. Regarding price developments, the Central Bank stated that "inflation will decrease gradually over the coming months, as the statistical base effect wanes amidst slowing demand in the economy". Inflation eased in August but remains above the Central Bank's target of 2.5% with a tolerance margin of plus/minus 1.0 percentage points.