# reach new posts by Marek Belka and Jan Winiecki #
14.01. Warsaw (PAP) – The Monetary Policy Council decided to keep interest rates unchanged – reads, released on Wednesday after a two-day meeting of the MPC. The Council did not rule out further monetary policy adjustment.
“The Council decided to keep the NBP interest rates unchanged. The Council underlines that in the environment of the Polish economy is still uncertainty as to the future economic situation. If you lengthen the expected period of deflation and thus increase the risk of inflation to remain below the target in the medium term, and the incoming data will be confirmed slowdown in economic activity and maintain a low growth environment of the Polish economy, the Council does not rule out further monetary policy adjustment “- reads read by the President of the National Bank of Poland Marek Belka.
at the Wednesday meeting of the MPC left interest rates unchanged. On an annual basis NBP reference rate will continue to be 2.00 per cent., The lombard rate at 3.00 per cent., The deposit of 1.00 per cent., While the rediscount rate of 2.25 percent.
The Communication Council also indicates the cause of low inflation. Pointed out that “the increase in global economic activity remains moderate,” and also in the last month, still strongly decreased the price of oil. “
” With moderate economic growth in the world is conducive to maintaining a very low inflation in many countries, and has contributed to the occurrence of deflation in the euro area “- reads.
On the other hand,” the major central banks continue to expansive monetary policy, keeping interest rates at historically low levels. “
In Poland, “the dynamics of economic activity in the fourth quarter. last. r. could slightly slow down ‘.” In November, the growth rate of industrial production fell close to zero, and the dynamics of construction output remained negative. At the same time decreased the growth rate of retail sales. The increase in lending to households and businesses remained stable “- concluded the MPC.
On the other hand” labor market data point to a further increase in employment in enterprises, which contributes to the continuation of the decline in unemployment after taking into account seasonal factors. “” At the same time sustained moderate wage growth in the enterprise sector indicates that wage pressure remains limited “- reads.
In response to a question at a press conference, Marek Belka admitted that” prolonged deflation is importance and may be an important factor that the Council will proceed to action. “He added that the MPC” pursues the inflation target in a flexible way. “
” I mean, when factors for ultra-low inflation, or as is currently about deflation are a supply, import, and do not have much to do with domestic demand – you can not expect a hasty, impatient to work on the part of the MPC, “- said the president of the NBP.
” Adaptation (feet – PAP) is still possible, but there is no reason – and this is the opinion of the majority of the Council – that is, the very rush “- he added.
Beam explained that, according to sit on the MPC opponents of further interest rate cuts, further cuts would not provide any benefits, and could bring harm – destabilize the financial system. Asked if deflation may be good, Beam explained that MPC members have different views on the subject. Poland compared with the countries of the euro area. He pointed out that our country different from their small debt – both public and private.
“In those countries, deflation can be a disaster (…). I’m not surprised that the ECB takes this very, even if there are no instruments to prevent it. In Poland, the situation is different,” – he said . He pointed out that Poland is able – with economic growth of 3 percent. and zero inflation – to stabilize the level of public debt and deficit.
He added that the deflation of wages are not rising, which means that domestic demand is growing. “For this reason, my personal concern of deflation is less” – he said. He stressed, however, that they do not know how long this situation will persist as long as it will not have a negative impact on the company and whether they are able to function in conditions of deflation. According Beams deflation certainly makes life difficult for a single entity – the Ministry of Finance.
President of the NBP estimated that in his opinion there is room for rate cuts, but whether they happen, will determine two factors – first of all, what will happen in the economy, and the majority of the Council will share this view.
Member of the Board Jan Winiecki (nieukrywający that it is opposed to cutting interest) added that no one – neither the MPC or, for example. The European Central Bank “does not have a key to sesame,” which would allow for the opening of a return to the inflation target . According to him, the NBP doing “what is possible and not what it seems that you can do.” “We will not be kicked out of the horse, that is, with the global trends on the supply side,” – said Winiecki.
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