Top Presidential economic adviser urges interest rate cut today

President Aleksander Kwasniewski's top economic adviser Marek Belka urged the Monetary Policy Council (RPP) on Tuesday to lower interest rates during its two-day meeting ending today. He claims that extremely high interest rates support a strong zloty, which is harmful to the country's exports, since 45 % of Polish export companies report they are incurring loses. Belka pointed out that there is no risk in cutting interest rates, as " inflation pressure is subsiding and domestic demand growth is falling." However, some analysts anticipate that the RPP will not cut interest rates during the current meeting, due to its worries over loose fiscal policy at the end of this year and the fact that core inflation is still rising despite the very strong zloty. Other analysts expect the rates to be cut by 100 basis points in June or July. Hanna Gronkiewicz-Waltz, former head of the central bank and now a vice-president at the European Bank for Reconstruction and Development, expressed concern about cutting the rates, saying it would be better to wait until inflation drops. (Reuters) M.T.