No surprises as RPP leaves rates as they are amid government criticism

In line with market expectations, the National Bank of Poland (NBP) left interest rates unchanged yesterday. At its monthly meeting the NBP's M onetary Policy Council (RPP) decided to leave the main market rate, the minimum 28-day intervention rate, at 10%. Explaining the decision, NBP president Leszek Balcerowicz said that since the last meeting of the RPP in February the economic forecasts had not changed. "At that time we also did not lower interest rates," he said. According to Balcerowicz there were more arguments in favor of not lowering interest rates, especially because the economy has not yet felt the effects of a string of previous interest rate cuts. The decision has not come as a surprise to the market, and the price of the zloty has not changed following the announcement. However, the decision has met with criticism from the government. According to government spokesman Michal Tober, "It's difficult to regard today's decision by the central bank as other than disappointing." Deputy Prime Minister Marek Pol commented, "The RPP is persisting in its restrictive policy and the news that rates were left on hold today is bad." (Rzeczpospolita, p. B1; Reuters) P.W.