NBP MPC Press Release - 2012-01-11
Central bank: nbp | Type: decision | Date: 2012-01-11

National Bank of Poland 
Monetary Policy Council 
 
 
00-919 Warszawa, ul. Świ ętokrzyska 11/21, phone 22 653 28 88, fax 22 653 13 28 
 
 
 
Warsaw, 11 January 2012 
 
INFORMATION FROM THE MEETING OF THE MONETARY POLICY 
COUNCIL 
held on 10-11 January 2012 
The Council decided to keep the NBP interest rates unchanged, i.e.: 
 reference rate at 4.50% on an annual basis; 
 lombard rate at 6.00% on an annual basis; 
 deposit rate at 3.00% on an annual basis; 
 rediscount rate at 4.75% on an annual basis. 
 
The recently released data suggest weakening of growth in the global economy; yet, the 
situation varies across regions. The United States saw some improvement in business 
sentiment, and its economic growth might have s lightly accelerated in th e recent period. In the 
euro area, on the other hand, economic growth continued to slow down, with forecasts for 
subsequent quarters being revi sed downwards. This negatively affects economic outlook for 
countries being euro area main trading part ners. Data on many emergi ng economies indicate a 
certain weakening of their economic activity. Infl ation in the world remains elevated, which is 
largely driven by still high commodity prices, including crude oil prices. 
Weaker global economic activity, fiscal imbala nce and deteriorating situation in the banking 
system observed in some euro area countries ar e contributing to persistently high risk aversion 
and heightened volatility of asset prices, in cluding exchange rates. Increased asset price 
volatility is further fuelled by huge liquidity surplus in the global financial markets related to 
strongly expansionary monetary policy pursued by major central banks. 
Despite worsening sentiment of domestic eco nomic agents, favourable data on industrial 
output, construction and assembly output and re tail sales indicate that in 2011 Q4 economic 
growth in Poland might have decl ined only slightly and remained at a relatively high level. On 
the other hand, deteriorating leading busines s condition indicators suggest that economic 
activity in the subsequent quarters may slow do wn, largely as a result of weaker economic 
growth in countries being Poland’s main trading partners. 
November saw a modest increase in the regi stered unemployment rate, which was however 
accompanied by a slightly rise of the employment in the corporate sector. Wage growth in 
enterprises remained moderate. 
Lending to corporates continued to rise in November. Similarl y, zloty-denominated mortgage 
loans to households maintained their relatively steep growth, while consumer lending in annual 
terms went on shrinking. 
2 
 
Annual CPI inflation in November increased more than anticipated, i.e. up to 4.8%, remaining 
markedly above the NBP's inflation target of 2. 5%. The rise in inflation was driven by growing 
food and fuel prices and higher co re inflation. An increase was al so noted in PPI inflation and 
inflation expectations of households and corporates. 
In the coming months, the annual CPI will continue to run at an elevated level. On the one 
hand, waning impact of VAT rate increases and considerable rises in food and energy prices 
observed in the first half of 2011 will be conduci ve to lowering inflation at the beginning of 
2012. On the other hand, persistently high co mmodity prices in the global markets and the 
previously observed weakening of the zloty exch ange rate will be supporting heightened price 
growth. 
In the opinion of the C ouncil, in the medium term inflatio n will be curbed by gradually 
decelerating domestic demand amidst fiscal tig htening, including reduced public investment 
spending, and interest rate in creases implemented in the firs t half of 2011, as well as the 
expected global economic slowdown. The impact of the situation in the global financial 
markets on zloty exchange rate together with a possible rise in commodity prices continues to 
be an upside risk to domestic price developments. 
In the opinion of the Council, th e monetary policy tightening impl emented in the first half of 
2011 supports inflation return to the target in th e medium term, however the risk of elevated 
inflation in the coming months has increased. At the same time the recent domestic economic 
developments indicate that the expected demand deceleration in the coming quarters may prove 
weaker than previously anticipated. The Coun cil decided to keep the NBP interest rates 
unchanged. The Council does not rule out th e possibility of further monetary policy 
adjustments in the future, should the outlook for inflation returning to the target deteriorate. 
In the recent period the National Bank of Poland sold some amount of foreign currencies in 
exchange for zlotys. Such transactions were consistent with the pursued monetary policy 
strategy defined in the Monetary Policy Guidelines. 
The Council stresses that the Monetary Policy Guidelines for 2012 do not allow for the 
possibility of the NBP purchasi ng Treasury securities as monetary policy instrument. In the 
context of the current distortions in the internationa l financial markets the Council reiterates 
that the National Bank of Poland is a lender of last resort to banks.