Release of the Meeting of the Monetary Policy Council
May 16, 2002
- At the meeting today, the Monetary Policy Council accepted the Report on the Performance of Monetary Policy Guidelines in 2001 and approved the Report on NBP Operations in 2001.
- The Council discussed the strategy of Poland's getting ready to the membership in the Economic and Monetary Union and decided that the best solution for the country would be the acceptance of the single European currency - the euro, as soon as possible, after getting the membership in the European Union. It requires meeting of conditions defined in the Maastricht Treaty, inter alia, a sustained achievement of:
- a low inflation (not higher than by 1.5 percentage point above the average inflation rate in three European Union countries where inflation was the lowest),
- a budget deficit not higher than 3% GDP.
The Council emphasized that meeting of these criteria in a short time is favorable for the development of the economy. Entering the euro zone in a short time would also bring other benefits such as:
- lowering of transaction costs,
- firm reduction of exchange rate risk,
- price transparency,
- increase of competition.
A possibility of the acceptance of the euro in a short time would mainly depend on the reduction of public finance deficit.
- The Council has also analyzed the exchange rate of the zloty within the recent period, emphasizing that the budget balancing - necessary for the acceptance of the euro in a short time - will be favorable for the elimination of an excessive pressure on the appreciation of the Polish currency.
At the same time, the Council suggests that in order to affect the level of the exchange rate of the zloty in the direction stipulated by the Government, the foreign currency necessary to pay off and service the foreign debt should be purchased by the Government on the currency market and not at the National Bank of Poland.