Poland’s economy would have to lose steam, rather than just undergo slower inflation, to justify an interest-rate cut, central banker Andrzej Bratkowski said.
The Polish zloty is still “somewhat undervalued,” Andrzej Bratkowski, a member of the Monetary Policy Council, said in an interview with TVN CNBC television late yesterday.
The threat of deflation is forcing Polish central bank Governor Marek Belka to put interest-rate cuts back on the agenda.
Poland’s inflation rate dropped to the lowest in 11 months in May, bolstering the case for cutting borrowing costs to a record as price pressure remains absent.
Polish consumer-price growth slowed in August as fuel costs eased, building the case for an interest-rate cut this year.
Poland’s central bank signaled the possibility of an interest-rate cut this year, with Governor Marek Belka saying the inflation rate may fall below zero in “the summer months.”
Polish central bank Governor Marek Belka moved to cool market expectations of an interest-rate cut while keeping his options open in case economic growth slows.
"In any case, it's certain to be a long time before we see inflation at levels requiring a quick rate increase."
- Andrzej Bratkowski on Feb 21, 2014