Bullish sentiment from Polish central bank governor Slawomir Skrzypek. Bloomberg reports him saying that Polish rate setters should “start to think about tightening monetary policy” since the central bank’s own forecasts show inflation accelerating to 3.5 percent by 2012. This is in contrast to some bearish sentiment last week from the newest members of Mr Skrzypek’s rate setting council.
The Polish central bank has kept the 7-day reference rate on hold at 3.5 per cent, as expected. The economy has been growing while inflation has been falling, making the timing of a rate rise uncertain.
This month’s board contained three new members, whose relatively bearish views made a rate rise this month less likely. Traders are also becoming more cautious, pricing in a 0.7 percentage point rise in the next six months. Last month they were pricing in a 0.8 percentage point rise. Read more
Polish President Lech Kaczynski has just appointed three new members to the central bank – and they have swiftly given their views on the economy.
Zyta Gilowska, Andrzej Kazmierczak and Adam Glapinski are the newest members of the monetary policy council. Read more
Poland’s central bank held the benchmark seven-day reference rate at 3.5 per cent for the seventh month, as expected. The Bank noted risks for the global recovery as central banks start to mop up the money injected during the crisis.
Policymakers are expecting inflation to continue to slow toward their target, having accelerated in December, touching a the upper end of the bank’s 1.5 – 3.5 per cent target.
“We should expect more serious discussion at the next monthly meeting as the new Council will be fully constituted and it will know the new inflation projection,” said Lukasz Tarnawa, chief economist at PKO Bank Polski in Warsaw. He predicts rates will stay on hold all year.
Traders aren’t so sure. Read more