National Bank of Poland leaves reference rate unchanged at 2½%

By Tali David

Minneapolis, Sept. 4 - National Bank of Poland's Monetary Policy Council decided to leave its reference rate unchanged at 2½% at a meeting held Tuesday and Wednesday, according to an announcement from the bank.

The Lombard rate was left at 4%, the deposit rate at 1% and the rediscount rate at 2¾%.

The council said that in the second quarter of 2013 global economic activity growth was somewhat higher than in the first quarter yet persisted at a moderate level. GDP growth in the United States accelerated and, after a few quarters of decline, GDP in the euro area increased.

The incoming data on the economic situation at the beginning of the third quarter points to continued gradual recovery in the major developed economies, the council said. Major emerging economies in turn saw persistently low - as for those countries - economic activity growth.

The council said that in the second quarter economic growth, after a period of strong slowdown, slightly accelerated. Yet GDP growth remained considerably below its potential, in the council's view.

The number of working persons in the economy was lower for the second quarter than in the corresponding period of last year, the council said. Still, month-on-month data from the corporate sector points to a possible halt of job losses in the recent months. The seasonally adjusted unemployment rate stabilized at a heightened level, which supported low wage growth.

The consumer price index increased to 1.1% year-over-year in July but remained markedly below the bank's inflation target of 2.5%. The increase in inflation was driven by regulatory factors, which also pushed up core inflation, as well as higher growth in the prices of vegetables and fuels. Demand and cost pressures in the economy remained low, and inflation expectations of households continued to decline.

The council said that given low inflation pressure and a moderate scale of the expected recovery, its assessment interest rates should be kept unchanged at least until the end of 2013.

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