Poland Central Bank Raises Rates Again

(RTTNews) - Poland's central bank raised interest rates for a second time this year, citing the risk of high inflation that could hurt the economic recovery and in a bid to curb inflation expectations.

The Monetary Policy Council decided to increase the NBP interest rates by 0.50 percentage points, the National Bank of Poland said in a statement on Thursday. The benchmark reference rate was thus raised to 2.75 percent from 2.25 percent.

The previous change in the rate was a 50 basis point hike in January.

"In a longer perspective, inflation will decrease, which will be supported by expected fading of some global shocks currently boosting price growth, as well as by an increase in the NBP interest rates," the central bank said.

"At the same time, amidst further economic recovery and expected continuation of favorable labor market conditions, as well as probably more lasting impact of external shocks on price dynamics, there persists a risk of inflation running above the NBP inflation target in the monetary policy transmission horizon."