Poland's new monetary policy strategy for 2016

Poland central bank's Monetary Policy Council decided last month not to change the monetary policy strategy. In its "Monetary Policy Guidelines for 2016", it keeps the medium-term inflation target unchanged at 2.5% with a symmetrical band of deviations of ±1 percentage points.

The Council judges macroprudential policy to be an indispensable instrument, complementary to flexible inflation targeting, says Societe Generale. The Council pointed out that shocks affecting the economy "may cause inflation to temporarily deviate from the target". 

The Council determines the time necessary for inflation to return the target, depending on: "the character of the shock, its persistence and the overallassessment of risks posed by the shock to both price stability and broadly understood macroeconomic stability in the medium term." This strategy will be implemented by the new Council.