Poland again holds reference rate at 2% amid sharp market volatility

By Susanna Moon

Chicago, Feb. 4 – National Bank of Poland’s Monetary Policy Council said it again opted to keep the reference rate unchanged at 2% at the council meeting held on Tuesday and Wednesday amid “heightened volatility in the financial markets.”

As previously noted, the rate has been held steady since the rate cut from 2½% in October.

The council does not rule out a monetary policy adjustment soon, however, if the expected period of deflation is extended, which would boost the risk of inflation remaining below the target in the medium term, according to a bank notice.

In December, Consumer Price Index inflation fell to negative 1% year over year, lower than expected. This was accompanied by a further decrease in most core inflation indexes, which confirms the absence of demand pressure in the economy.

Inflation expectations remain very low, the bank said.

Meanwhile, global economic growth remains moderate with variations across countries, the bank noted.

The Lombard rate remained unchanged at 3%, and the bill rediscount rate remains 2¼%. Those rates had been lowered in October from 4% and 2¾%, respectively. The deposit rate stayed unchanged at 1%.

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