NBP MPC Press Release - 2012-05-09
Central bank: nbp | Type: decision | Date: 2012-05-09

National Bank of Poland 
Monetary Policy Council 
 
 
00-919 Warszawa, ul. Świ ętokrzyska 11/21, phone (+4822) 653 28 88, fax (+4822) 653 13 28 
 
Warsaw, 9 May 2012 
 
INFORMATION FROM THE MEETING OF THE MONETARY POLICY 
COUNCIL 
held on 8-9 May 2012 
The Council decided to increase the NBP interest rates by 0.25 percentage points: 
 reference rate to 4.75% on an annual basis; 
 lombard rate to 6.25% on an annual basis; 
 deposit rate to 3.25% on an annual basis; 
 rediscount rate to 5.00% on an annual basis. 
Incoming data signal a stabilisation of economic activity in the global ec onomy at a low level. 
Stagnation in the euro area is accompanied by m oderate growth in the United States. At the 
same time, economic growth in emerging economi es, despite some weakening in China, has 
slightly accelerated. Global economic growth is being hampered by the ongoing balance sheet 
adjustments of enterprises and hous eholds in some developed countri es as well as by high fuel 
prices. Despite some decline, global inflation remains heightened, still driven by high 
commodity prices. 
In April sentiment in international financial markets worsened which contributed to the 
depreciation of exchange rates of emerging mark et currencies, includin g the zloty. Worsening 
sentiment also led to the decrea se in commodity pric es in global markets, though those prices 
remain high. 
In 2012 Q1, Poland’s economic growth probably remained relatively high, although it has 
slowed down somewhat. Relatively high economic activity seems to be evidenced both by the 
continuously strong growth in retail sales and by the NBP business survey showing that in 2012 
Q1 economic situation of enterprises remained g ood. Some improvement in expectations of the 
surveyed enterprises with regard to future business conditions also signals that economic 
slowdown in subsequent quarters could be limite d. At the same time, a slowdown in economic 
activity is indicated by some other business in dicators and weaker growth of industrial and 
construction output. 
In March, the unemployment rate remained elevated and growth of employment in enterprises 
stayed low. At the same time, wage growth in the enterprise sector was still moderate. Lending 
to enterprises continued to rise fast, while gr owth in lending to households weakened, which 
was driven by ongoing decline in consumer loans and a further slowdown of mortgage lending. 
In March, the annual CPI inflation decreased to 3.9%, remaining markedly above the NBP’s 
inflation target of 2.5%. A slight decrease was al so noted in core inflation. At the same time, 
households’ inflation expectations remained high. 
In the opinion of the Council, in the coming months inflation is likely to stay above the upper 
limit of deviations from the inflation target. Elev ated inflation will be driven by the previously 
observed weakening of the zloty and high commod ity prices. Strong grow th in administered 
 
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prices will also contribute to elevated inflation. The abov e-mentioned factors may support 
heightened inflation expectations. 
The Council assessed that in the medium term the expected economic slowdown will be 
conducive to lowering inflation. However, si nce inflation will continue to be negatively 
affected by factors beyond the im pact of domestic monetary policy, the expected slowdown 
may be insufficient to allow inflation to return to the target in the medium term. The risk of 
inflation remaining elevated is also heightened by the persistence of relatively high inflation 
expectations. 
The Council assessed that containing the risk of inflation remaining above the target in the 
medium term requires an increase of the NBP’s interest rates. The incoming data will enable an 
assessment whether another adjustment of interest rates will be justified.