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RPP's Chojna-Duch sees no need for interest rate hikes yet

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Date: 2010-03-11 15:19

There is no need for interest rate hikes for the time being, deems member of the Monetary Policy Council (RPP) Elzbieta Chojna-Duch. According to her, such a scenario might be pondered, when inflation was on the rise - currently, though, long-term inflation forecasts are being upgraded "in plus."


Even though the RPP's chairman an governor of the National Bank of Poland (NBP) Slawomir Skrzypek said recently that the Council should start pondering whether it would be advisable to start the process of monetary policy tightening, Chojna-Duch joins a group of RPP members who do not see a need for a fast move in this respect. 

The central path of the central bank's CPI projection, published in February, assumes that the average annual inflation will likely amount to 1.8% in 2010 and will rebound to 2.4% in 2011 and to 3.5% in 2012 from last year's 3.5%. According to the new projection, the CPI target (2.5% y/y) will be reached in Q2/2010 vs. early 2010 expected in the October document. 

The RPP kept interest on hold in February and is expected to leave them flat at least by late 2010, though it might change its policy bias to tightening from neutral within the next few months.

lk/tom