Poland maintains policy rate at 4½% but keeps eye on inflation, zloty

By Susanna Moon

Chicago, Jan. 11 - National Bank of Poland's Monetary Policy Council said it maintained the bank's reference rate at 4½% at its meeting on Tuesday and Wednesday. The bank last raised the rate by 25 basis points in June.

Annual Consumer Price Index inflation rose more than expected in November to 4.8%, staying high above the bank's inflation target of 2.5%.

The rise in inflation was driven by growing food and fuel prices and higher core inflation, according to a statement by the bank.

The bank said that inflation could be pulled down this year by the waning impact of VAT rate hikes and spikes in food and energy prices, but that prices could also see a boost from commodity pressures in the global markets and the weakening of the zloty exchange rate.

The council reiterated that inflation in the medium term is likely to be curbed by easing demand amid fiscal tightening and an economic slowdown worldwide.

Inflation risks have risen, but the monetary tightening in the first half of last year supports inflation return to the target, the bank said.

The bank said it sold some foreign currencies in exchange for zlotys, which is consistent with its monetary policy.

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