NBP MPC Press Release - 2011-06-08
Central bank: nbp | Type: decision | Date: 2011-06-08

National Bank of Poland 
 
Monetary Policy Council 
 
ul. Świ ętokrzyska 11/21, 00-919 Warszawa, Poland, phone (48 22) 826 99 55, fax (48 22) 826 37 51, 
 
 
Warsaw, 8 June 2011 
 
INFORMATION FROM THE MEETING OF THE MONETARY POLICY 
COUNCIL 
held on 7-8 June 2011 
The Council decided to increase the NBP interest rates by 0.25 percentage points: 
 reference rate to 4.50% on an annual basis; 
 lombard rate 6.00% on an annual basis; 
 deposit rate 3.00% on an annual basis; 
 rediscount rate 4.75% on an annual basis. 
 
In 2011 Q1 activity in the global economy continued at a relatively high leve l. Particularly strong 
GDP growth was observed in Germany, Poland’s main trading partner. Infla tion in most countries 
continued to run at a heightened level, to a large extent due to high commodity prices. 
Recently, however, signs of a possible weakening of global economic activity could be observed; 
the growth in commodity prices in the world mark ets has also been halted. Furthermore, concerns 
about the stability of public fina nces in some peripheral euro area countries ha ve intensified, which 
has contributed to increased risk aversion in the international financial markets. 
In Poland, data on GDP in Q1 confirmed that a relatively high economic growth was sustained at 
the beginning of 2011. GDP growth was mainly driven by growing domestic demand, and stable 
growth in private consumption was supported by a ri se in investment. In turn, April saw a slight 
deceleration of growth in indus trial output and construction, c oupled with a continuing upward 
trend in retail sales. 
In Q1 economic growth was accompanied by a faster than in the previous quarters rise in the 
number of employed and by a declining unemploymen t rate as indicated by LFS data. At the same 
time, wage pressure did not strengthen, as evident from slower growth of wages in the economy. In 
April 2011 wage growth accelerated considerably in the corporate sector; yet, it is difficult to assess 
whether this acceleration will persist. At the same time, the upturn in corporate lending was 
sustained. The relatively fast growth in mortgage loans to households also continued and a further 
decline in consumer loans was observed. 
In April annual CPI inflation rose to 4.5%, rema ining significantly above the NBP’s inflation target 
of 2.5%. The acceleration in price growth, although mainly connected with a further rise in food 
and energy prices, concerned also core inflation, whic h is reflected in a faster price growth in most 
of the other categories of goods and services. PPI in flation and inflation expectations of households 
remained at a relatively high level. 
In the coming months, the annual CPI inflation rate wi ll continue at a height ened level, mainly due 
to the previously observed strong growth in global commodity prices. 
 
 
 
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In the opinion of the Council, the el evated level of current inflati on and inflation expectations, as 
well as the risk of rising wage pressure amidst a considerable growth in employment, justify 
increasing the NBP interest rates at the present meeting. 
The Council assesses that the substantial mone tary policy tightening implemented since the 
beginning of 2011 should enable inflation to return to the target in the medium term. 
The Council does not rule out fu rther adjustment of monetary policy, should the outlook for 
inflation’s return to the target deteriorate. 
An important factor affecting the monetary policy is the situation of public finances. In order to 
maintain macroeconomic stability, and comply with the euro adoption criteria, decisive measures 
need to be implemented, aimed at a lasting reduc tion of the deficit of the general government sector 
and at curbing the increase of public debt. 
Although the share of foreign currency loans in ne w mortgage loans to hous eholds has decreased, 
undertaking measures aimed at preventing fast growth in foreign cu rrency lending to households is, 
in the opinion of the Council, important for macr oeconomic stability. Such measures can contribute 
to increasing the effectiveness of the monetary policy transmission mechanism. Therefore, the 
Council expects that measures aimed at curbing the supply of new foreign currency loans to 
households will be introduced. 
The Council maintains its view that Poland should jo in the ERM II and the euro area at the earliest 
date possible, after meeting the necessary legal, economic and organizational conditions.