NBP MPC Press Release - 2010-11-23
Central bank: nbp | Type: decision | Date: 2010-11-23

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, 23 November 2010 
 
INFORMATION FROM THE MEETING OF THE MONETARY POLICY 
COUNCIL 
held on 22-23 November 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. 
 
The moderate recovery in the wo rld economy is continuing. Data on GDP in 2010 Q3 in the major 
developed economies point to a sl ight acceleration of the economic growth in the United States, 
with a concurrent slowdown obser ved – in quarter-on-quarter term s – in euro-area GDP growth. 
The continued favourable economic situation in Germany supports the rise in Polish exports. 
Economic growth in the majority of develope d countries 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 growi ng 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 measur es undertaken and envisa ged by major central 
banks, continue to be an important uncertainty factor for the global economic growth. 
In line with expectations, the scale of monetary expansion in the United States was increased, which 
helped maintain positive sentiment of investors in the financial markets and contributed to higher 
commodity prices. At the same time, the intensification of fiscal problems in some euro-area 
countries, in particular in Ireland, was conducive to increasing uncertainty in the financial markets. 
Data on the Polish economy in the second half of 2010 signal faster economic growth than in the 
first half of the year. Industrial output continues to grow rapidly, construction and assembly output 
is also on the rise. Production capacity utilisation has been steadily rising. Enterprises continue to 
report a very good financial and liqui dity situation. Enterprises in crease their workforce, which 
approaches the pre-crisis levels. The employm ent rise is supported by continued high wage 
discipline. In 2010 Q3 the wage growth in the ec onomy slowed down; limited wage pressure is also 
indicated by the data on wages in the enterprise sector. Wage growth may be slowed down by the 
growing number of economically active, which is also conducive to halting decline of the registered 
unemployment rate (adjusted for seasonal factors). 
Lending to enterprises remains limited, mainly due to reasons related to the demand for credit. 
There is a stable rise in mortgage loans to house holds, despite the fact that banks are tightening the 
 
 
 
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criteria for granting loans to this sector, which is primarily connected with an ongoing 
implementation of Recommendation T. At the sa me time, banks are gradually lowering their 
margins included in interest charged on this type of loans. 
In October 2010 the annual CPI inflation rose to 2. 8%, i.e. above the NBP’s inflation target of 
2.5%. The inflation rise was prim arily connected with a further in crease in food and energy prices, 
while core inflation net of those prices remained unchanged. At the same time, the remaining core 
inflation indices increased. In the months to come , the growth of food and energy prices may be 
expected to continue, which will be conducive to higher CPI inflation. In 2011 the level of prices 
may be additionally slightly increased by the announced change in VAT rates. 
In the Council’s assessment, the still limited inflationary and wage pressure in th e Polish economy 
and the persistent risk of increased capital infl ows to the emerging economies, including to Poland, 
amidst the extended period of expansionary monetary policy of major central banks, combined with 
the risk of weakening of global economic growth, 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 monetary policy transmission mechanism. 
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.