Poland keeps 2½% reference rate; domestic economy gradually recovers

By Jennifer Chiou

New York, May 7 - National Bank of Poland's Monetary Policy Council again decided to keep its reference rate unchanged at 2½% at a meeting held on Tuesday and Wednesday.

The Lombard rate was maintained at 4%, the deposit rate at 1% and the bill discount rate at 2¾%.

According to a council news release, Consumer Price Index inflation stood at 0.7% in March, well below the bank's 2.5% inflation target. That figure is unchanged from December through February and up from 0.6% in November.

The council said that gradual economic recovery remains moderate, although the economic situation varies across countries.

The release noted that data on domestic economic activity confirm a continuation of the gradual recovery in Poland. In March, industrial output and retail sales continued to rise, yet slower than expected.

At the same time, construction and assembly output picked up, the council said.

In the United States, GDP growth slowed down in the first quarter of 2014, yet recent data have indicated an improvement in business conditions in the subsequent months.

At the same time, recovery in the euro area continues, albeit at a moderate pace, the bank said. In the largest emerging market economies, activity growth remains slow relative to previous performance, including China, where it weakened in the first quarter of 2014.

Moderate growth in global economic activity is conducive to maintaining low inflation in many countries.

Poland last cut the reference rate to 2½% from 2¾% on July 3, 2013.

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