NBP MPC Press Release - 2010-09-29
Central bank: nbp | Type: decision | Date: 2010-09-29

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, 29 September 2010 
 
INFORMATION FROM THE MEETING OF THE MONETARY POLICY 
COUNCIL 
held on 28-29 September 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. 
 
Modest recovery in the global eco nomy has continued and its pace in the second half of 2010 is 
likely to be lower than in the first half of the year. In the developed countries adjustments in the 
balance sheets of households, enterprises and fina ncial institutions together with persistently 
unfavourable situation in the labour market, are conducive to weakening economic growth in the 
subsequent quarters. The effects of high fiscal imbalance and its anti cipated reduction, as well as of 
monetary expansion, including non-conventional m easures undertaken by central banks constitute 
an important risk factor for economic growth in those countries. At the same time, continuing high 
economic growth in major emerging economies supports global economic activity. 
In the past few months prices of some agricultural commodities in the global markets have 
increased markedly. At the same time, the observed alleviation of tensions in the financial markets 
have favoured the inflow of capital to emerging economies and the appreciation of those countries’ 
currencies, including the appreciation of the zloty. 
According to GUS preliminary estimates in 2010 Q2 , GDP rose by 3.5% y/y (as compared to 3.0% 
y/y in 2010 Q1). This was mainly driven by a rise in the domestic demand related to accelerating 
growth in the consumption demand and the continuing rebuilding of inventories. Gross fixed capital 
formation continued to decrease, yet, its decline was lower that in the previous quarter. Higher GDP 
growth was accompanied by a rise in the number of the economically active persons, including a 
rise in the number of working persons, and by c ontinuing moderate wage growth. At the same time, 
financial situation of enterprises improved. 
The data on the Polish economy in 2010 Q3 point at a gradual stabilisati on of economic growth. 
Industrial output continues to grow rapidly; growth, yet irregular , has also been re gistered in the 
construction and retail sales. Capaci ty utilization in enterprises con tinues to grow gradually. Yet, 
certain deterioration has been s een in the enterprises’ and house holds’ assessment of the future 
economic situation. The situation in the labour market has been improving gradually which is 
reflected in the continuing rise of employment in enterprises and falling unemployment rate. 
Lending to enterprises remains limited, mainly due to reasons related to the demand for credit. 
Growth in household mortgage lending continues to rise gradually. 
 
 
 
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In August 2010 the annual CPI infl ation amounted to 2.0%, thus re mained below the NBP inflation 
target set at 2.5%. Core inflation continued at a low level. Yet, the majority of measures of inflation 
expectation exceed the current CPI in flation. High growth has been re corded in producer prices. In 
the subsequent months rising food and energy pr ices may contribute to a gradual rise in CPI 
inflation; in 2011 the level of prices may also be slightly increased by the announced change in 
VAT rates. 
In the Council’s assessment, moderate economic growth and the accompanying limited wage and 
inflationary pressures, along with the risk of w eakening global economic growth in the subsequent 
quarters justify keeping the NBP interest rates unchanged. 
At the same time, the Council will analyse the signs of a possible rise in inflationary pressure, and 
will follow the developments in inflation expectations. 
An important factor affecting monetary policy 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. 
The Council adopted the Monetary Policy Guidelines for 2011 and approved the document 
International Investment Position of Poland in 2009. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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