RPP's moderate approach follows growing uncertainty over politics and fuel

Yesterday's cut amounted to 50 basis points, but no further decreases should be expected any time soon. Currently the basic interest rate of the National Bank of Poland stands at 5.5%. RPP also changed its monetary policy approach from soft to neutral. "[This] means that the likelihood of interest rates cuts are as likely as their increase," said Leszek Balcerowicz, chairman of the NBP. Marian Noga, a member of the RPP, stressed that the decision is aimed at keeping inflation at the level of 2.5%, which should be maintained until the end of 2007. Leszek Balcerowicz suggested that moderate approach to monetary policy is the result of growing uncertainty related to among others high oil prices and political risk due to approaching parliamentary elections. Economy Minister Jacek Piechota said that the decision of the RPP should contribute to faster GDP growth. (Rzeczpospolita, pp. A1, B1) M.M.