National Bank of Poland leaves reference rate unchanged at 4¾%

By Tali David

Minneapolis, July 5 - National Bank of Poland's Monetary Policy Council decided to leave its interest rates unchanged at 4¾% at a meeting held Tuesday and Wednesday, according to an announcement from the bank.

The Lombard rate was also left at 6¼%, the deposit rate at 3¼% and the rediscount rate at 5%.

The council said that incoming data suggest weakening activity in the global economy. Stagnation in the euro area is accompanied by moderate growth in the United States.

At the same time, economic activity in the major emerging economies is deteriorating. Weakening growth in the global economy contributes to falling commodity prices.

The council said that in May employment growth in the corporate sector remained weak and the unemployment rate persisted at elevated levels.

At the same time, wage growth in the corporate sector was still moderate.

The consumer price index fell to 3.6% in May, remaining above the bank's inflation target of 2.5%. Decline was also noted in core inflation and inflation expectations of households and corporations.

The council said that in the medium term, economic slowdown amidst fiscal tightening and interest rate increases implemented in 2011 and 2012 will be conducive to inflation returning to the target.

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