At their Nov 5-6 sitting, members of the Monetary Policy Council (MPC) agreed that interest rates should be kept unchanged at the present meeting, and the current and expected economic situation spoke in favour of keeping interest rates unchanged at least the middle of 2014, according to the "minutes" of the meeting, published by the National Bank of Poland (NBP). Thus their reiterated their earlier stance.
MPC assessed that in spite of the expected acceleration of economic growth, GDP growth in the coming years (i.e. in the central bank's November projection horizon) would remain moderate, and the risk of a substantial increase in domestic inflationary pressure, which would pose a threat to meeting the inflation target in the medium term, was limited. This assessment was also supported by NBP's projection of inflation and GDP.
The monetary authorities stressed that the reduction in interest rates in H1 of 2013 and their stabilization in H2 of the year supported the recovery of the domestic economy, return of inflation to the target and stabilisation in the financial markets.
In the press release published directly after the November sitting, MPC changed the wording of the key paragraph of its communique to read: "The Council assesses that NBP interest rates should be kept unchanged at least until the end of the first half of 2014," while in the previous few months, it pointed to the end of this year in this statement. NBP governor and MPC chairman Marek Belka stressed at that time that all MPC member agreed with the wording of this sentence.
After the decision's announcement, bank economists stuck to their expectations that interest rates will be raised probably only in September or Q4 of 2014.