Interest rate hike on the horizon to fight inflation

Poland's interest rates must rise in the next couple of months if the annual average inflation is to drop, according to a Monetary Policy Council member Halina Wasilewska-Trenkner.

"Interest rates have to rise because the economy is imbalanced," she told TVP Info in an interview. "I don't know when rates will go up but it is a matter of a month or two."

Meanwhile, another member of the Monetary Policy Council Marian Noga told TVN CNBC that Poland is unlikely to reach its forecasted inflation at 2.9 percent in 2009 agreeing that another interest rate is likely in the future.

"In January 2009 inflation is likely to be at 4.4 percent and it seems to be impossible to go down to 2.9 percent in a while year," said Noga.

The finance ministry has revised its projections in the 2009 budget, lowering next year's growth forecast to 4.8 percent from 5.0 percent. It did keep its annual average inflation prediction at 2.9 percent year-on-year.

In order to maintain inflation, the council has raised rates eight times since April 2007, bring the current rate at 6 percent with a possible increase by 25 basis points in the next couple of months.

Source: Reuters