Poland. RPP seen keeping interest rates flat in May regardless of inflation's surge
2011-05-10 10:09:47
A surge of consumer inflation in early 2011 coupled with still high inflationary expectations will likely fail to provide enough arguments for the Monetary Policy Council (RPP) to raise interest rates again during its May 10-11 sitting.
Merely one out of twelve bank economists surveyed by the ISB newswires expect another monetary policy tightening this month (after 25bps hikes in January and April).
Another reason for a rate increase could be the relatively strong, sustained economic growth, but analysts deem that the RPP would now prefer to check whether the recent decline of global commodities prices would be sustained.
As of April, the key market intervention rate is 4.0%. In March, inflation was 4.3% y/y (vs. 3.6% in February, i.e. well above the central bank's target of 2.5% +/-1pp), while inflationary expectations eased to 4.0% in April from 4.6% a month earlier.