Government use central bank bill to put pressure on MPC

The Monetary Policy Council (MPC) reacted with dismay yesterday to Parliament's decision to continue work on a bill that would curb the central bank's independence and contradict EU laws. The controversial bill, sent to a parliamentary committee for scrutiny late on Wednesday, has little chance of survival in its current shape, but some analysts say its authors will use it to press the central bank to ease its tough monetary policy. Wieslawa Ziolkowska, an MPC member announced the body would set its medium-term inflation target at 2.5% year-on-year plus/minus 1%. However, fellow MPC member Boguslaw Grabowski, negated her announcement saying, "No inflation target change has been accepted by the Council, although its members have varying views about what it should be." The MPC, which will hold its usual monthly policy meeting on February 25-26, has set maintaining annual inflation below 3% as its top monetary policy goal. (Reuters) A.K.