IMF representative warns Monetary Policy Council against interest rate hike

The International Monetary Fund (IMF) representative in Poland Franciszek Rozwadowski said he did not see any need for the Monetary Policy Council (RPP) to raise interest rates but rather it should concentrate on term inflation instead of annual inflation goals. Most analysts on the market expect the RPP to raise rates next week after inflation hit a two-year high of 11.6% year-on-year in July. In related news, analysts at BRE Bank assert most sectors of the Polish economy are controlled by monopolies and the agricultural sector was overprotected. The analysts are against the believed imminent hike in interest rates by the RPP as this would not curtail the supply side influence which has been powering inflation in recent months. According to BRE Bank chief economist Janusz Jankowiak, the RPP should consult with the government on practical inflation targets and should abandon the ambitious target of 4% inflation by 2004. (Prawo i Gospodarka, page 1, Reuters)