Maja Goettig, chief economist at Bank BPH SA in Warsaw, comments on the Polish central bank’s decision today to raise the benchmark seven-day interest rate by a quarter-point to 4.25 percent.
“This was very unexpected. The Monetary Policy Council probably raised rates because they were scared of possible second-round effects after a rise in inflation.
“Investments rebounded strongly in the first quarter and together with the inflation rate, which is expected to rise even higher, the central bank must have felt it had to act.
“Today’s increase may mean we’re going to see a bigger rise in rates this year than expected. I was looking for two more hikes by the end of this year, but now I’m thinking it could be more.”
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