Poland Central Bank Holds Key Interest Rate As Expected

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Wednesday, the Polish central bank left interest rates unchanged as expected.

The Narodowy Bank Polski retained the reference rate, which is the benchmark interest rate, at 3.5%. The bank had lowered its key policy rate by 25 basis points from 3.75% in June.

The central bank maintained the Lombard rate at 5%, the deposit rate at 2% and the rediscount rate at 3.75%.

In an earlier note, analysts at Danske Reserach said they see some room for lowering rates at the beginning of next year. Yet, the group noted that the latest inflation, wage data and retail sales trends are slowly closing that window. The consumer price inflation rose to 3.6% in July , faster than the 2.5% targeted by the NBP.

Regarding the strong outcome of the July retail sales, released a day earlier, Danske Research said it remains puzzling, given the ongoing deterioration in the labor market.

Data released by the Central Statistical Office on Tuesday showed that retail sales increased 5.7% year-over-year in July, faster than the 0.9% growth in the previous month. Economists were looking for an increase of just 1.4%.

Also on Tuesday, data showed that the jobless rate rose to 10.8% in July from 10.7% in June.

Wednesday, the Polish central bank left interest rates unchanged as expected. (Market News Provided by RTTNews)