Waiting For Inflation To Moderate

Poland - Monetary Policy - Feb 03 2012

BMI View: The National Bank of Poland elected to keep its rate on hold at 4.50% for the sixth meeting in a row on January 11. This move comes on the back of a strong Q411 real GDP performance, which shows that the economy is still firing on all cylinders. Although the monetary authorities will be aware that the macroeconomic headwinds originating from the eurozone will hit the country in 2012, no action has been taken to support the economy yet, as inflation remains well above the NBP's target. However, as price growth loses steam, we expect a 100bps cut to 3.5% by end-2012.

For the sixth consecutive meeting, the National Bank of Poland (NBP) elected to maintain its benchmark interest rate at 4.50% on January 11. Hitherto, the decision to keep interest rates on hold was dictated by the necessity to keep the zloty supported in order to prevent a breach of a constitutionally-entrenched public debt limit by year-end (see our online service, November 10, 'Grimmer Regional Outlook To Drive Rate Cuts In 2012'). Now that this risk has been avoided, the latest decision to keep the rate on hold is rather dictated by the fact that...

No Signs Of Abatement

Poland - CPI and Core Inflation, y-o-y and m-o-m