Press conference after the May meeting
of the Monetary Policy Council
The Monetary Policy Council lowered the interest rates by 0.25 percentage points. This is an adjustment of earlier decisions, but should not be regarded as an opening of a new series of cuts, explained the NBP President at the conference.
At its meeting held on 7 and 8 of May 2013, the Monetary Policy Council decided to lower the interest rates by 25 basis points. Thus, starting from 9 May the reference rate will amount to 3.00% in annual terms.
The press conference after the meeting of the Council was attended by the NBP President, Prof. Marek Belka and members of the Council: Prof. Elżbieta Chojna-Duch and Prof. Jan Winiecki. The NBP President explained that another interest rate cut cannot be ruled out in the coming months, but emphasized that it was equally likely that the interest rates would remain at their current level. He also stated that the “Information from the meeting of the MPC” defined the main objective of the future interest of the Council slightly differently than in previous months. In its earlier press releases, the Council emphasized that its future decisions would depend on projections of both inflation and economic growth. This time inflation was the priority. The decision taken in May was largely motivated by the fact that, as written in the Information, “the risk of inflation staying markedly below the target in the medium term has risen.” Prof. Marek Belka added that no risk of deflation was observed.
Answering the question of whether the May cut will result in foreign investors withdrawing from purchasing Polish Treasury bonds, the NBP president reminded that large demand for Polish Treasury securities resulted from widespread good assessment of macroeconomic policy in Poland and the conviction that the foundations of the Polish economy were strong.
When enquired about the prospects for economic recovery, Professor Marek Belka stated that the economic growth rate should not decline further, though its current structure raised concerns. Currently the main growth component is net exports. “The economy cannot go far on this one engine only,” said the NBP President. Recovery of investment and an increase in consumer demand will be of key importance.