Poland's Monetary Council leaves interest rates unchanged

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

The reference rate will remain at 1.50 percent, the RPP said in a statement after its Wednesday meeting.

The RPP's decision is in line with market expectations.

It means that the National Bank of Poland's Lombard rate will continue at 2.50 percent, the deposit rate at 0.50 percent, and the rediscount rate at 1.75 percent.

The RPP last amended the level of Poland's interest rates in March 2015, lowering them by 50 basis points. 

In information from its meeting, the Monetary Policy Council confirmed its assessment that the current level of interest rates is conducive to keeping the Polish economy on a sustainable growth path and maintaining macroeconomic stability.

The Council wrote that incoming data point to continued good economic conditions. Growth continues to be driven primarily by consumer demand, supported by rising employment and wages, disbursement of benefits and very good consumer sentiment. 

This, according to RPP members, is accompanied by a recovery in investment, mainly in the public sector. Growth in economic activity is also supported by strong external demand, reflected in significant export growth.

Annual consumer price growth declined in Poland and stands at a moderate level. At the same time – although wage growth is faster than in previous quarters – core net inflation of food and energy prices remains low, the document states.

In the Council’s assessment, favourable economic conditions in the Polish economy will continue in the coming quarters. However, it added that GDP growth would probably be lower than in the second half of 2017.