The Polish zloty was soft today after the nation’s central bank left interest rates at record low yesterday and pledged to keep monetary policy extremely accommodative for a prolonged period of time.
The National Bank of Poland kept its benchmark interest rate at 2.5 percent yesterday. The policy statement was not particularly pessimistic:
In Poland, industrial and construction output as well as retail sales in 2013 Q3 confirm low, yet accelerating economic growth. At the same time, improving leading indicators point to gradual recovery continuing into quarters to come.
Yet the central bank was concerned about weak inflation:
In the opinion of the Council, gradual economic recovery is likely to continue in the coming quarters, however, inflationary pressure will remain subdued.
As a result, the NBP expects to keep rate low for some time:
Considering the current statistical data as well as the projection of GDP and inflation that confirm low inflationary pressure and the expected moderate economic recovery, the Council assesses that NBP interest rates should be kept unchanged at least until the end of the first half of 2014.
USD/PLN rose from 3.0850 to 3.0878, following the advance to 3.0924, and EUR/PLN went up from 4.1712 to 4.1736 as of 2:12 GMT today.
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