Poland keeps reference rate at 1.5%, reports no inflationary pressure

By Angela McDaniels

Tacoma, Wash., May 6 – National Bank of Poland’s Monetary Policy Council voted to keep the reference rate at 1.5%, the Lombard rate at 2.5%, the deposit rate at 0.5% and the rediscount rate at 1.75% at its meeting on Thursday and Friday, according to a bank news release.

In the opinion of the council, price growth will remain negative in the coming quarters due to the substantial decline in global commodity prices.

At the same time, the council expects GDP growth to remain stable and consumer demand to continue to be the main driver of economic growth.

The downside risks to global economic conditions and the volatility of commodity prices remain the sources of uncertainty for domestic economy and price developments, the council said.

With a negative output gap and moderate growth of average nominal wages, currently there is no inflationary pressure in the Polish economy, according to the news release. Annual consumer price growth and producer price growth stay negative.

The council believes external factors – particularly the sharp fall in global commodity prices and low price growth in the environment of the Polish economy – continue to be the main sources of deflation and are accompanied by very low inflation expectations.

The council maintains its assessment that the current level of interest rates is conducive to keeping the Polish economy on a sustainable growth path and maintaining macroeconomic balance.

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