NEWS
1st February 2007 - Poland\'s interest rates left on hold but likely to rise in near future
Poland's monetary council met for the first time under the new leadership of Slawomir Skrzypek, and as anticipated, left rates on hold. Polish interest rates have now been at 4% (reference rates) since February 2006, though there is an expectation that rates will rise later in 2007 or early in 2008.
"Maintaining inflation close to target and thus creating conditions for sustainable long-term economic growth may require monetary policy tightening," the council continued in its policy statement.
More than ever, the council's evolving inflation outlook is diverging from what central bank researchers are putting into the inflation projection. The latest is due for full publication Thursday.
The earliest numbers out of that document show strong expectations that inflation will be at least in the upper end of the target range, if not entirely above, at end-2007 and end-2008.
Council members rejected the projecction's short-term inflation outlook outright, then said that price pressures mid-term from rising wage growth could be largely offset by rising productivity and rising and increasingly global competition.
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