Belka rules out deeper rate cuts
22:50
Marek Belka, president of the National Bank of Poland has ruled out deeper interest-rate cuts even as policy makers in the neighboring euro region weigh quantitative easing to ward off deflation.
On April 3, European Central Bank President Mario Draghi buoyed investors by saying policy makers backed QE, or large-scale purchases of assets, if needed to bolster prices.
While Belka said a decision by the ECB to start asset purchases would “change the environment” for Polish policy making, it would largely be offset by the removal of monetary stimulus by the US Federal Reserve.
Poland is experiencing “a clear, vigorous economic recovery” accompanied by “low” inflation which would help “stimulate consumption,” Belka said. Cutting rates in this environment would be “pro-cyclical” and a “mortal sin” of monetary-policy making, he said.
Mr Belka reaffirmed the central bank’s pledge to keep borrowing costs at a record low until at least September 30 and signaled the policy may be extended after new inflation and growth projections are released in July.
