RPP unlikely to cut rates before March in spite of good money supply news

Money supply increased by zl.30.9 million in Poland over all of 2000, considerably less than Monetary Policy Council (RPP) expectations of zl.38.8-47.9 billion. However, RPP is still unlikely to decide to lower interest rates at its meeting next week. "[The lower than expected growth of money supply] is good news. The more such news, the closer we get to an interest rate cut," said RPP member Cezary Jozefiak. "However, RPP looks at the whole picture of the economy, particularly at its prospects and these are not quite clear yet, for example because of the shape of this year's budget draft," he added. Members of the rate-setting authority also say that good inflation and money supply figures are no surprise, so they do not change the council's attitude towards lowering interest rates. Analysts such as Krzysztof Rybinski from ING Barings and Katarzyna Zajdel-Kurowska from Citibank believe RPP will cut interest rates in March and not at its upcoming meeting. (Gazeta Wyborcza, p. 18, Parkiet, p.7) T.J.