Finance Minister calls on rate council to accelerate easing cycle
February 25, 2013
Polish Monetary Policy Council should cut interest rates faster in order to prevent cooling down of the economy, Finance Minister Jacek Rostowski told broadcaster TVP Info Thursday evening.
"In situation when the European economy is getting cooler, the council, instead of helping the Polish economy to 'warm up' a little bit, cools it down even more," Rostowski said. "That is why we appeal to the rate council to reduce interest rates of the central bank faster."
"The slowdown takes place as a result of what is going on in the euro zone and also due to the fact, and we can only deplore it, that Poland has the highest real interest rates in the entire European Union," he said.
Rostowski also said that the fiscal tightening implemented by the Polish government creates tremendous room for the council to cut rates.
"In the last three year, in line with the EU recommendations and in line with what the rate council said two years ago, we have very significantly cut budget deficit, so we created a tremendous room, I think for rate cuts," Rostowski told broadcaster Polsat News.
In recent weeks Rostowski has often encouraged the rate council to increase the scale of easing, partly blaming insufficient, in his opinion, rate cuts, for the current slowdown.
Poland's Monetary Policy council has taken 100 bps from official interest rates to 3.75% in four consecutive moves in an easing cycle begun in November 2012.