Monetary Policy Council keeps interest rates intact as expected
February 9, 2017
Central Bank NBP governor Adam Glapinski
Poland's Monetary Policy Council extended the rate hold to its twenty-third month keeping the central bank (NBP) reference rate at a record low 1.5 %.
The February decision, matching nearly all known signals and unanimous market expectations, keeps the deposit rate at 0.50% and the Lombard rate at 2.50% - all record lows set in a 50 bps cut by the prior council in March 2015.
The Council fully brushed off the latest rise in inflation readings and said the price outlook remained sufficiently benign to stick with the current rate regime for the foreseeable future.
"For now there is consensus," Central Bank NBP governor Adam Glapinski told an afternoon briefing of the council read. Council members are feeling out their differences about the how, when and why of the eventual first rate hike, but none of the drivers for such a move are on hand today.
Inflation may spike in "the first months" of 2017, but should stabilize thereafter "and if that holds that would argue for holding rates at current levels," Glapinski said.
Poland's rate council may focus on helping growth as rate cuts could come only in case of inflation lastingly remaining above target and the current situation with inflation is "luxurious", Glapinski also said.