Poland's Monetary Council leaves interest rates unchanged

Poland's Monetary Policy Council (RPP) left the country's interest rates unchanged on Tuesday.

The reference rate will remain at 0.10 percent, the RPP said in a statement after its Tuesday meeting.

This means that the National Bank of Poland's Lombard rate will remain at 0.50 percent, the deposit rate at 0.00 percent, and the rediscount rate at 0.11 percent.

A further recovery in economic activity may be expected over the coming months, the RPP wrote in a communique after its meeting.

"This will be supported by a further improvement in the economic situation in the environment of the Polish economy and economic policy measures, including the easing of NBP's monetary policy. At the same time, the scale of the expected recovery in activity may be limited by uncertainty about the further course and effects of the pandemic, lower income growth and weaker sentiment of economic agents than in previous years. The pace of the economic recovery could also be limited by the lack of visible zloty exchange rate adjustment to the global pandemic-driven shock and to the monetary policy easing introduced by NBP," the RPP stated.

"The NBP monetary policy easing mitigates the negative economic impact of the pandemic, limiting the scale of the fall in economic activity and supporting incomes of households and enterprises. Consequently, it alleviates the fall in employment and deterioration in the financial situation of enterprises, thus supporting economic recovery," the RPP stated.

The RPP also announced that the National Bank of Poland (NBP) "will continue to purchase government securities and government-guaranteed debt securities on the secondary market as part of the structural open market operations. The timing and scale of the operations will depend on the market conditions."