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.
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 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.
The threat of deflation is forcing Polish central bank Governor Marek Belka to put interest-rate cuts back on the agenda.
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.”
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.
Polish consumer-price growth slowed in August as fuel costs eased, building the case for an interest-rate cut this year.
Poland should enjoy record-low borrowing costs for most of this year even with economic expansion poised to almost double, according to central banker Andrzej Bratkowski.
"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