Russian meat ban and low excise on fuel create expectation of interest rate cut

According to the Central Statistical Office (GUS), the prices of commodities and services increased by 0.7% in 2005. "Inflation will remain low as long as the ban on exports of meat to Russia is kept in force and the lowering of excise duty influences the price of fuel. However, changes in the remaining groups of commodities are also not foretelling the growth of inflation," said Piotr Bujak, economist with BZ WBK. According to analysts, the Monetary Policy Council (RPP) should lower interest rates by 25-50 base points in Q1. "If something prevented a drop in interest rates, then this would have to be 'a political storm'," said Wojciech Kuryłek, chief economist with Kredyt Bank. (Parkiet, p. 8) M.M.