Monetary council issues expected rate hold
July 3, 2014
Poland's Monetary Policy Council held lending rates flat at the July sitting, in line with its vow to hold rates flat to end-Q3, but after signals that its forward guidance would be subject to revision as the macro environment no longer remains unambiguous.
The council kept its key reference rate at the all-time low of 2.50%, where it has sat since an easing cycle ended after a July 2013 cut.
The council has no immediate rate cut plans related to the removal of forward guidance from its policy statement and a cut in September remains highly improbable, while rate hikes are also unlikely in the coming months, central bank head Marek Belka told a news conference following the July sitting of the Monetary Policy Council.
Poland's economy will likely maintain its growth pace, but without further acceleration, Belka also said.
Polish GDP growth rate is expected with 50% chance to fall within 3.2-4.1% range in 2014, 2.6-4.5% in 2015 & 2.3-4.5% in 2016, while the country’s consumer inflation has a 50% chance of falling in the range of -0.1-0.4% in 2014, 0.5-2.1% in 2015 and 1.3-3.1% in 2016, according to the central bank's latest inflation projection, cited in the Monetary Policy Council's July 2014 policy statement.