Poland may cut rates if economy weakens – central bank head
July 8, 2014
National Bank of Poland's chief Marek Belka
Poland’s Monetary Policy Council may cut interest rates if the economy weakens or prospects for such weakening appear, similar decision might be made if the zloty appreciates abruptly, central bank NBP head Marek Belka said on Monday.
Poland's rate council should cut rates "amid significant weakening of the economic activity, Belka told Dziennik Gazeta Prawna. "Or with visible prospects of such weakening. Possibly, if an abrupt appreciate of the zloty takes place, nor example due to actions of other central banks."
Deflation is no such factor, as it will be short-live and will not hurt the economy, the NBP head said. Also, having reasons to believe inflation will start increasing, the council need not lower interest rates.
In its July decision, the rate 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 also dropped a forward rate guidance from its statement and said it will watch incoming data while taking further rate decisions.