NBP MPC Press Release - 2010-03-31
Central bank: nbp | Type: decision | Date: 2010-03-31

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, 31 March 2010 
 
INFORMATION FROM THE MEETING OF THE MONETARY POLICY 
COUNCIL 
held on 30-31 March 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. 
 
Growth in economic activity in the United States and a slow improvement in economic conditions 
in the euro area continue. However, the labour market situation in the developed economies remains 
unfavourable, which is in line with expectations. At the same time, the largest emerging economies 
see noticeable recovery in economic activity acco mpanied by a rise in inflation. The global 
economic recovery has so far been supported by strongly expansionary macroeconomic policies 
based on both conventional and non-standard instru ments. However, negative consequences of 
those policies, mostly those related to public debt accumulation, are becoming increasingly visible. 
Over the recent period, currenc ies of many emerging economies, including the zloty, have 
appreciated. Nonetheless, uncertainty in the international financial markets remains elevated, 
mostly driven by the fiscal crisis in Greece. Th e measures undertaken by international institutions 
seem to restrain this uncertainty only to a moderate degree. 
GUS data on GDP have confirmed earlier estimate s according to which 2009 Q4 saw a recovery in 
economic activity. Monthly data on the situation of the Polish economy at the beginning of 2010 
point to a continued improvement in some sectors, primarily in manufacturing. At the same time, 
however, the most recent data on retail sales as well as construction and assembly output may signal 
slightly weaker than expected economic activity in Poland in 2010 Q1. It cannot be ruled out, 
though, that this is a temporary phenomenon relate d to unfavourable weather conditions. The small 
scale of decrease in employment in the enterprise sector may signal a gradual deceleration of the 
unfavourable labour market tendencies, despite furt her growth in unemployment rate largely driven 
by increasing labour force participat ion. The growth in loans to the non-financial sector remains 
low. At the same time, the improvement in the financial results of enterprises for 2009 may reduce 
their demand for bank loans. 
In line with expectations, in February 2010 annual CPI inflation decreased markedly (to 2.9% as 
compared with the revised downwards 3.5% in Janua ry 2010), moving closer to the inflation target 
of 2.5%. The fall in the annual inflation rate was primarily driven by lower annual rates of fuel and 
energy carriers prices, largely due to a statistical base effect. Core inflation also declined. 
 
 
 
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In line with available forecasts, in the months to come the annual CPI will be lowered by negative 
base effects connected with the surge in prices of excise goods and f ood prices in 2009. Other 
factors conductive to lower inflation include: low current demand pressure, the hitherto 
considerable zloty appreciation and moderate growth of labour costs. In turn, inflation decline in 
2010 may be curbed by rises in comm odity prices in the world market s and in administered prices, 
including gas prices and fees subject to decisions of local government units. 
In the Council’s assessment the probabilities of inflation running below or above the inflation target 
in the medium term are balanced. In the Council ’s view, however, the impact of the hitherto 
pursued expansionary macroeconom ic policies abroad and their prospective reversal are an 
important risk factor which may affect this assessment. 
An important factor affecting monetary policy is the situation of the public finance sector. 
Introducing measures aimed at permanently reducing the deficit of the gene ral government sector 
and at curbing the increase of the public debt will support macroeconomic stability and allow to 
meet the criteria for euro adoption. 
The Council maintains the opinion that Poland should join the Exchange Rate Mechanism II and the 
euro area at the earliest pos sible date, after meeting the necessary legal, economic and 
organisational conditions. 
The Council has adopted a resolution changing the resolution on creating and unwinding provisions 
against the FX risk of the zloty against foreign currencies at the National Bank of Poland.