NBP MPC Press Release - 2010-08-24
Central bank: nbp | Type: decision | Date: 2010-08-24

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, 24 August 2010 
 
INFORMATION FROM THE MEETING OF THE MONETARY POLICY 
COUNCIL 
held on 23-24 August 2010 
The Council decided to keep the NBP interest rates unchanged, i.e. 
 reference rate 3.50% on an annual basis; 
 lombard rate 5.00% on an annual basis; 
 deposit rate 2.00% on an annual basis; 
 rediscount rate 3.75% on an annual basis; 
 discount rate 4.00% on an annual basis. 
 
Released data, includin g the data on GDP for 2010 Q2, point to weakening economic growth in 
some of the largest economies, in particular in the United States. By contrast, in 2010 Q2 the 
economic growth accelerated signifi cantly in Germany and to a lesser extent in the euro area as a 
whole. However, the risk of weakened external de mand sustains the uncertainty as to the euro area 
economic growth in subsequent quarters. The adjustments in th e balance sheets of households, 
enterprises and financial institutions continue in the developed economies. 
In the recent period the price of some agricultural commodities have increased markedly in the 
global markets. At the same time, the observed allevi ation of tensions in the financial markets have 
favoured the inflow of capital to emerging economies and the a ppreciation of those countries’ 
currencies, including the strengthening of the zloty. 
The data on the Polish economy indicate a stabilis ation of economic growth. Fast growth in 
industrial output and a slow growth in construction continued. Growing employment in the 
enterprise sector and a decline in the unemployment rate (also in seasonally adjusted terms) both 
point to a gradual improvement in the labour ma rket situation, which, however, has not been 
accompanied by growing wage pressure so far. In 2010 Q2 growth of wages in the economy 
continued to fall gradually despite some accelera tion in enterprise sect or wages. Lending to 
enterprises remains limited, mainly due to reasons related to the demand for credit. 
 
In July 2010 the annual CPI inflation decreased (to 2.0%), running below the NBP's inflation target 
of 2.5%. The decline in the annual CPI inflati on mainly resulted from negative base effects 
connected with a strong rise in the prices of fuels and excise goods one year before. At the same 
time, all measures of core inflation decreased. In subsequent months, in flation may be gradually 
increased by food and energy price growth. In the first months of 2011 the level of prices may be 
raised by the announced change of VAT rates. Th e impact of this change on inflation should 
nevertheless be minor. 
The Council has discussed factors that may fuel inflationary pressures in the medium term. 
 
 
 
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An important factor affecting mone tary policy is the situation of public finance, especially in the 
face of a changed attitude in many European co untries to high budget deficits and growing public 
debts. 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 stability. 
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. 
The Council approved The Balance of Payments of the Republic of Poland in 2010 Q1.