Kołodko urges RPP to cut rates this week

Yesterday Finance Minister Grzegorz Kołodko piled pressure on the Central Bank to cut rates this week. Seven out of 12 analysts polled by Reuters this week expect the Monetary Policy Council (RPP) to leave its main market rate unchanged at 6.0% after producer prices in March hit a two-year high and consumer inflation slightly topped forecasts. The data published yesterday showed net inflation, seen as a key core inflation indicator by Central Bankers, to increase by 1.4% last month against a 1.5% rise in February. But Kołodko said in an Internet chat yesterday: "I expect a traditional, or not a significant, rate cut of 25 basis points, although there is a room for a three percentage point reduction." Kołodko has blamed the country's sluggish economy on the RPP's small-step approach to lower borrowing costs, engaging in an increasingly harsh war of words with monetary policy makers. (Reuters) M.M.