National Bank of Poland’s MPC leaves benchmark rate on hold, unlikely to change rates in March meeting

The National Bank of Poland's Monetary Policy Council (MPC) has kept the benchmark interest rates on hold at 1.5%, on par with market expectations. The council stated that the present interest rate level assists in keeping Poland's economy on a sustainable growth path and warrant macroeconomic balance. The council added that a further complete evaluation of the economic growth and price developments outlook will be possible in the coming quarters after it is familiar with the March forecast of GDP and inflation.

According to the MPC, a gradual acceleration of core inflation is likely with the help of a stable economic growth amidst euro area economic rebound and positive labor market conditions. Hence the lowering of rates is unlikely in the coming months. The central bank governor said that he does not foresee any changes in rates in coming months.

"In our opinion, the MPC might discuss rate changes in March. However, we think that the new Council may continue previous monetary policy. Although we expect a downward revision in CPI projection, in our opinion the MPC will keep rates unchanged. We reiterate our forecast of a steady 1.5% key interest rate in 2016", says Societe Generale.