The period of low interest rates appears to be coming to an end

Market interest rates have been growing over the past few weeks and analysts now fear that this trend might continue right across into early 2004. It is also more and more likely that the National Bank of Poland will raise official rates. The main reason for that would be concerns about the growing budget deficit and higher inflation. Krzysztof Rybiński, chief economist of BPH PBK, believes that signs of an economic revival, both at home and abroad would also work to increase interest rates. In his opinion, by the end of 2004, both the Fed and European Central Bank will raise their rates, which will directly influence Polish monetary policy. Experts believe that inflation is still under control thanks to the fact that growing employment has not translated into price increases. "The growing financial risk of public finances will further weaken the złoty unless interest rates go up," said Rybiński. (Rzeczpospolita, pp. A1, B1) M.M.