Press conference following the June meeting of the Monetary Policy Council
At its June meeting, the Monetary Policy Council decided to keep NBP interest rates at the pre-sent level, maintaining the assessment that they should remain unchanged until the end of the third quarter of 2014.
At its meeting on 2 and 3 June, the Monetary Policy Council decided to keep NBP interest rates un-changed. The reference rate remains at 2.50%, the Lombard rate at 4.0%, the deposit rate at 1.00% and the rediscount rate at 2.75%.
This MPC decision rested on the assessment that gradual economic recovery is likely to continue in the coming quarters, while inflationary pressures will remain subdued. “Therefore, the Council decided to keep the NBP interest rates at the current level. The Council maintains its assessment that NBP interest rates should be kept unchanged until the end of the third quarter of 2014”, read the release of the Council. During the press conference following the meeting of the MPC, Professor Marek Belka explained that this fragment of the press release should not be treated as an announcement of a change in the level of interest rates after the third quarter of 2014. “This is not the most likely scenario of our actions. However, to be honest we cannot exclude a reduction in interest rates at a certain mo-ment.”
In response to questions from journalists about which information the monthly updating of the expert forecasts brings, President Belka said, “As far as GDP is concerned, everything is going according to our forecasts. Regarding inflation, it is lower and the readings indicate that the inflation path will be lower and the inflation target will be reached later. He also stressed that inflation persisting for an extended period at a low level does not yet mean deflation. “The fact that in a certain month the readings could be negative on a year-on-year basis can hardly be called persistent deflation.
Another reason why the MPC should not be expected to react in the near future is that it responds to long-term tendencies in the economy. “This is inflation significantly below the NBP target, but it is to a large degree imported. However, it does not hamper the economic recovery. Some nervous reactions which would give an impulse to inflation would be unreasonable,” said Professor Marek Belka.
The Council also upheld its opinion that, “more comprehensive assessment of monetary policy per-spectives and potential adjustment of interest rates will be possible after the Council gets acquainted with incoming information, including the July NBP projection”.
The conference was attended, apart from the Chairman of the Council, by Professor Anna Zielińska-Głębocka and Professor Jerzy Osiatyński.