President's top economic aide appeals to monetary council to cut interest rates

Professor Marek Belka, President Aleksander Kwasniewski's top economic adviser, on Friday urged the central bank's Monetary Policy Council (RPP) to swiftly cut the country's growth-inhibitively high interest rates, among the highest in Europe. Since mid-2000 the RPP has retained official borrowing costs at 19%-23% despite a continuing drop in inflation. The RPP's restrictive monetary policy dealt a serious blow to the economy when in Q4 of 2000 it depressed growth to an estimated 2.3% from 6% in the first three months of the year. "The RPP seems to retain its restrictive approach to policy regardless of its December move to a neutral stance for future policy," said Belka, a former finance minister who could play a major roll in a future government led by the social democrats, which polls show as the favorites in upcoming parliamentary elections. Analysts now predict the hawkish council will begin easing interest rates either at the end of this month or in March. (Reuters)