Polish Rate Increase Would Be Emergency Measure, Nordea Says

Poland’s central bank raising interest rates would be an “emergency tool,” while the chance of rate cuts this year is decreasing, Nordea Bank AB said.

Statements by central bankers including Andrzej Kazmierczak, Adam Glapinski and Jerzy Hausner suggesting the chance of raising borrowing costs reflect their focus on inflation, while a strengthening zloty will probably help moderate price increases, Piotr Bujak, Nordea’s chief economist for Poland, wrote in a research note today.

“A rate hike in Poland could be considered only as an emergency tool -- in case the euro-area debt crisis gets out of control,” Bujak wrote. “The real choice in Poland is between keeping rates on hold and rates reduction.” The “stronger than expected resilience of the Polish economy to the crisis abroad implies a lower probability of rate cuts this year.”

All 35 economists surveyed by Bloomberg expect the benchmark seven-day interest rate to remain unchanged at 4.5 percent for an eighth month tomorrow.

To contact the reporter on this story: Katya Andrusz in Warsaw at kandrusz@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net