Poland keeps tightening monetary policy, lifts reference rate to 4½%

By Susanna Moon

Chicago, June 8 - National Bank of Poland's Monetary Policy Council said it decided to raise the bank's reference rate by 25 basis points to 4½% at a meeting held June 7 and June 8.

The bank raised the rate by 25 bps to 4¼% at its meeting in May and by 25 bps to 4% in April.

The elevated level of current inflation and inflation expectations, as well as the risk of rising wage pressure amid a considerable growth in employment, justify the rate hikes, according to a bank press release.

In April, annual Consumer Price Index inflation rose to 4.5%, which remains above the bank's inflation target of 2.5%. In the next months, the inflation rate will remain high, due to commodity prices.

The council said its substantial monetary policy tightening since the beginning of the year should allow inflation to return to the target in the medium term.

The bank raised the lombard rate to 6%, the deposit rate to 3% and the rediscount rate to 4¾%.

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