Belka Says Polish Rate Increases Remain More Probable Than Cuts

Poland’s central bank is more likely to raise interest rates than cut them as inflation stays above the bank’s 2.5 percent target, Governor Marek Belka said at a news briefing in Warsaw today.

The Narodowy Bank Polski increased its inflation forecast for this year to between 3.6 percent and 4.5 percent and cut its growth forecast to between 2.2 percent and 3.8 percent today, while the rate-setting Monetary Policy Council left the benchmark rate unchanged at 4.5 percent for a ninth month.

Following are excerpts from Belka’s comments to reporters.

On whether he still believes interest-rate increases are more probable than cuts:

“I’m sticking to that.”

On inflation:

“We’re not satisfied with the fact that inflation isn’t getting worse; it needs to get better.”

On the currency:

“There have been dramatic developments on the foreign-exchange market. The zloty weakened significantly in the fourth quarter, and in the first months of this year we’ve seen a significant strengthening.

“The zloty is closer to its fundamental value than it was before.”

On economic growth:

“Our forecasts show that inflation is slowing gradually. But the latest economic data surprised us.

“If we had had January data when we prepared our projection, the path would have been the same, but we would have seen the inflation rate falling considerably more quickly.”

Dorota Bartyzel at

Before it's here, it's on the Bloomberg Terminal. LEARN MORE