Polish five-year bond yields rose from a record low after policy maker Andrzej Kazmierczak said the central bank shouldn’t rush to cut interest rates.
The yield on notes maturing in April 2017 rose two basis points, or 0.02 percentage point, to 4.03 percent as of 5:44 p.m. in Warsaw, according to data compiled by Bloomberg. It fell to a record-low of 4.01 percent on Oct. 19 as economic data and comments from policy makers signaled the possibility of a rate cut as early as next month. The zloty was little changed at 4.1047 against the euro today.
Central bankers should keep a “cautious approach to any rate reduction” as monetary easing elsewhere in Europe and in the U.S., as well as government investments, will help reignite Polish growth, Kazmierczak said in an interview with Bloomberg published today. He was among eight policy makers on the 10- member Monetary Policy Council who voted for a quarter-point rate increase in May, making Poland’s central bank the only one in the European Union to raise borrowing costs this year.
“We could see the yields trade higher after falling to record lows last week,” Marcin Mrowiec, chief economist at Bank Pekao SA in Warsaw, wrote in an e-mailed comment today.
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