WARSAW (IntelliNews) -- Poland’s central bank sees no need for loosening of monetary policy, even as it expects the European Central Bank (ECB) to take easing measures in June, National Bank of Poland (NBP) Governor Marek Belka told Capitol Intelligence/IntelliNews.
The ECB may make a symbolic cut to its already very low interest rate of 0.25% in June, Belka said. Inflation in the 18-country eurozone declined to 0.5% in May, well below the ECB’s 2% target, further fuelling fears of deflation.
Despite very low inflation in Poland, at just 0.3% in April, the NBP sees no threat of deflation, as accelerating growth will eventually lead to a build-up of inflationary pressures, a member of the Monetary Policy Council (MPC), the central bank’s rate-setting committee, said.
The Polish central bank will be interested to see how radical the ECB is in its easing measures, starting June, the MPC member said. One intriguing idea for the ECB would be to copy Denmark’s central bank in turning its interest rate on deposits negative, in effect charging banks for keeping money with the central bank.
Whatever steps the ECB takes, they are unlikely to have effect large enough to significantly impact the balance of risks to Polish growth and inflation, the MPC member said. The złoty may make some ground against the euro, but any gains are unlikely to be big enough to affect Poland’s trade balance with the eurozone, the recipient of over two-thirds of Polish exports.
The złoty now trades at 4.1530 to the euro, practically the same level as at the beginning of the year.
by Aleksander Nowacki in Warsaw
Glass wool manufacturing has resumed in Hungary after a 16-year break, as the first trial products rolled off the production line at a new thermal insulation plant built in northeastern Hungary ... more
Poland will acquire three synthetic aperture radar (SAR) satellites under a €200mn agreement with Polish-Finnish satellite operator ICEYE, the company said on May 14. The contract comes in the ... more
Erste Group acquired a 49% stake in Santander’s Polish bank for approximately €6.8bn, the Austrian lender said on May 5. The Austrian bank, the country’s largest, also agreed to purchase 50% ... more