Poland keeps rate steady at 2½% amid 'subdued' inflationary pressures

By Susanna Moon

Chicago, Dec. 4 - National Bank of Poland's Monetary Policy Council again decided to maintain its reference rate at 2½% at a meeting held on Tuesday and Wednesday.

Gradual economic recovery will continue in the coming quarters, but inflationary pressures will remain "subdued," according to the bank notice.

In keeping rates unchanged, the bank said economic demand and cost pressures remain low as Consumer Price Index inflation fell to 0.8% in October from 1% the previous month, which is well below the inflation target of 2.5%.

That was along with persistently low core inflation and a fall in producer prices in industry. At the same time, inflation expectations remained low, the bank said.

The council said it maintains its assessment that interest rates should be kept unchanged at least until the end of the first half of 2014.

After lowering rates in the first half of the year, keeping them unchanged in subsequent quarters supports recovery of the domestic economy, gradual return of inflation to the target and stabilization in the financial markets, the bank said.

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