NBP MPC Press Release - 2010-05-25
Central bank: nbp | Type: decision | Date: 2010-05-25

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, 25 May 2010 
 
INFORMATION FROM THE MEETING OF THE MONETARY POLICY 
COUNCIL 
held on 24-25 May 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. 
 
Further signs of recovery ar e appearing in the world econom y. However, the outlook for 
improvement in economic activity has been divergi ng across regions. The data released since the 
last MPC’s meeting, including the data on GDP in 2010 Q1, point at a grow ing investment activity 
and a revival in consumption demand in the United States. The rise in consumption has been 
supported by the improvement in the labour market situation in the United States. 
Preliminary estimates indicate a slight increase in the euro area GDP in 2010 Q1. Yet, as a result of 
the fiscal crisis in Greece and high uncertainty regarding the pace of curbing public finance 
imbalances in some other euro area countries, th e short-term outlook for economic growth in this 
region has deteriorated. 
At the same time, fast economic growth is recorded in the largest emerging economies. The ensuing 
risk of strong increase in economic imbalances resulting from a boom leads to a gradual 
macroeconomic policy tightening in those countries. 
Uncertainty connected with the fiscal crisis in Greece contributed to increasing volatility of asset 
prices in the international financial markets, including the prices of energy commodities. Growing 
risk aversion in the financial markets was also conducive to a marked depr eciation of the exchange 
rate of the euro against the US dollar and to the depreciation of currencies of emerging economies, 
including the zloty. 
The data on the Polish economy indicate a conti nuing economic recovery. An upward trend in 
manufacturing has continued. Rise in employment in the corporate sector, decline in unemployment 
rate suggested by preliminary estimates (in seasona lly adjusted terms) and the number of new job 
offers running at a high level might point to a gradual improvement in the labour market situation. 
At the same time, real wages in the corporate sector grew in annual terms, albeit still moderately, 
for the second consecutive month. Both the inve stment of enterprises as well as the capacity 
utilisation in the economy remain on a low level. The decline in bank loans to enterprises continues, 
yet, lending criteria to those entities are gradually and slightly eased. The growth in household loans 
stabilized at a moderate level. 
 
 
 
- 2 - 
The annual CPI inflation in April 2010 decreased again (to 2.4%), r unning slightly below the level 
of the NBP inflation target of 2.5%. The inflati on decline was largely driven by the lower annual 
growth of food prices. At the same time, core inflat ion also fell, yet, to a lesser extent than the CPI 
inflation. The factor limiting the decline in CPI inflation was the increase in the annul growth of 
energy prices. 
In line with available forecasts, in the months to come the annual CPI will still be lowered by 
negative base effects connected with the surge in the prices of excise goods and food prices in 2009. 
Also economic factors will be conducive to lower inflation: currently low demand pressure and 
moderate growth of labour cost s. In turn, inflation decline in 2010 may be reduced by rises in 
commodity prices in the world markets – though recently curbed – as well as by persistently 
elevated growth of some administered prices, in cluding the prices of ener gy carriers and services 
related to house maintenance. 
In the Council’s assessment the probabilities of inflation running below or above the inflation target 
in the medium term are balanced. 
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 will 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 approved the Report on the Operations of the NBP in 2009. 
At its meeting held on 18 May 2010, the Council adopted the Report on Monetary Policy 
Implementation in 2009 and positively assessed the Management Board of the National Bank of 
Poland as regards the implementation of monetary policy guidelines for the year 2009.