Monetary Policy Council decides on leaving interest rates unchanged

The Monetary Policy Council (RPP), after a two-day meeting, decided yesterday not to cut interest rates, despite pleas from some cabinet members, among them economy minister Janusz Steinhoff, for a continuation of the reduction in rates. Explaining the thinking behind their decision, members of the RPP said that an interest rate cut would in the present climate be a bad option for the Polish economy. They made specific mention of several recent developments, among them April's increase in the budget deficit to 90% of the total planned for the whole year, and the rising levels of uncertainty caused by budget revenues being lower than anticipated. They also suggested that the payment of compensation to victims of Nazi slave labor may fuel a rise in consumption demand. Market analysts were not surprised by the RPP's decision. (Gazeta Wyborcza, p.19) A.D.