Analysts: interest rates depend on how UMTS license proceeds are spent

The government meets next Tuesday to deliberate on how it will spend funds from the sale of UMTS third-generation mobile phone licenses, a decision, analysts say, that will have a major impact on the future direction of Poland's interest rates. The cabinet's decision whether to put the additional zl.3 billion it gained from the sale of licenses toward financing the budget or use it to finance the existing deficit will be decisive, say professionals. Separately, as of today, the National Bank of Poland (NBP) has a new president, Leszek Balcerowicz, who will be sworn in by parliament for a six-year term. Deputies approved him on Dec. 22 as successor to out-going Hanna Gronkiewicz-Waltz. The former president expressed confidence that Leszek Balcerowicz will continue monetary policy unchanged. She said, however, that she would not seek to advise Leszek on future policy direction, citing the new central bank head's lengthy experience and respected reputation in the world of finance. (Reuters, Prawo i Gospodarka, p.9)