Monetary Policy Council leaves interest rates unchanged amid inflation fears

The Monetary Policy Council (RPP) decided yesterday during its regular meeting to leave interest rates unchanged, thereby continuing tight monetary policy. News of the decision rocked Poland's financial markets, pushing down major stock and currency indices. Justifying its decision, the Council expressed concern that food prices would continue to rise until the end of the year and probably well into the first quarter of 2001. Another threat to the economy, they said, is the critical situation on global oil markets, where there is no sign yet of a drop in prices. The Council also claims that cost of living increases resulting from a rise in inflation could further slow down the growth trend in real wages. Although the state does not borrow money on the market, it acquires capital from foreign sources and in turn the money supply is growing. (Rzeczpospolita, p. B6)