NBP MPC Press Release - 2010-12-22
Central bank: nbp | Type: decision | Date: 2010-12-22

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, 22 December 2010 
 
INFORMATION FROM THE MEETING OF THE MONETARY POLICY 
COUNCIL 
held on 21-22 December 2010 
The Council decided to keep the NBP interest rates unchanged, i.e.: 
 reference rate at 3.50% on an annual basis; 
 lombard rate at 5.00% on an annual basis; 
 deposit rate at 2.00% on an annual basis; 
 rediscount rate at 3.75% on an annual basis; 
 discount rate at 4.00% on an annual basis. 
In line with the decision of the Monetary Po licy Council of 29 September 2010 (MPC resolution 
No. 7/2010) presented in the Monetary Policy Guidelines for 2011 regarding the withdrawal of the 
bill discount credit from the set of monetary policy instruments as from 1 January 2011 the discount 
rate will apply until the end of 2010. 
 
Moderate recovery in the world economy is continuing. Data from the United States and the euro 
area point to stabilizing growth in economic activ ity. Favourable economic s ituation has continued 
in Germany where GDP growth is to a growi ng extent supported by strengthening domestic 
demand. Yet, economic growth in the majority of developed countri es is still being curbed by high 
unemployment and ongoing adjustments in the ba lance sheets of households, enterprises and 
financial institutions. The continued rapid grow th in the major emerging economies has been 
decelerating slightly, which is related to tight ening of the economy policy in some of those 
countries, aimed at limiting the risk of growing macroeconomic imbalance. The effects of high 
fiscal imbalance and its planned reduction in the developed economies, as well as the effects of 
monetary expansion, including non-standard measures undertaken by major central banks, continue 
to be an important uncertainty factor for the global economic growth. 
Following the previously observed depreciation connected with intensification of fiscal problems in 
some euro area countries and the ensuing uncertainty in the financial markets, the zloty exchange 
rate has stabilized in the recent period. At the same time, global markets have seen a rise in the 
prices of crude oil and other commodities. 
Data on the Polish economy point to accelera tion of economic growth in 2010 Q3. Private 
consumption grew more rapidly than in the prece ding quarters, supported by a rise in employment. 
Also temporary factors could have contributed to higher consumption growth. Wage growth in the 
economy, including in the corporate sector, has remained at a low level. The rise in wages may be 
curbed by the growing number of the economically active, which contributes also to the rise in 
unemployment rate as confirmed by the BAEL data for 2010 Q3. There are still no clear signs of a 
recovery in investment activity. Yet, producti on capacity utilisation ha s been steadily rising. 
 
 
 
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Despite the favourable financial situation of the cor porate sector, the divergence between the 
situation of exporters and non-exporting companies is increasing. 
Lending to enterprises remains limited, mainly due to reasons related to the demand for credit. 
Mortgage loans to households, including foreign cu rrency denominated loans, continue to grow, 
which is accompanied by a gradual cutting of margins included in interest charged on loans. 
In November 2010 the annual CPI inflation fell to 2.7%, remaining above the NBP’s inflation target 
of 2.5%. The inflation decline was primarily connect ed with a fall in food and energy price growth. 
The majority of core inflation measures remain ed unchanged. The growth of PPI is running at a 
high level. In the months to come, CPI inflation may be expected to be heightened by high growth 
in fuel prices and increase in majority of VAT rates planned for 2011. 
In the Council’s assessment, the still limited inflationary and wage pressure in the Polish economy, 
uncertainty about the s cale of acceleration of GDP growth in Poland and the global economic 
recovery justify keeping the NBP interest rates unchanged. 
At the same time, the Council will continue to anal yse the signs of a possibl e rise in inflationary 
pressure. 
An important factor affecting the monetary polic y is the situation of pub lic finance. Introducing 
decisive measures aimed at permanently reducing the deficit of the general government sector and 
at curbing the increase of the public debt is necessary for macroeconomic stability and will allow 
the meeting of euro adoption criteria. 
In the opinion of the Council, introducing measures aimed at preventing fast growth in foreign 
currency lending to households is important for macroeconomic stab ility. Such measures can also 
contribute to increasing the effectiveness of mone tary 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 
possible date, after meeting the necessary legal, economic and organisational conditions.