The Narodowy Bank Polski (NBP), Poland's central bank, raised its benchmark interest rate by 50bps as expected to 1.75% on Wednesday. It also raised each of its other interest rates by 50bps; the discount rate on bills of exchange was lifted to 1.85% from 1.35%, the Lombard rate was lifted to 2.25% from 1.75%, while the deposit rate was lifted from 0.75% to 1.25%.
Market Reaction
USD/PLN strengthened on the rate decision from under 4.05 to current levels above 4.065.
Additional NBP comments, as summarized by Reuters:
"NBP may intervene in FX markets."
"Expects good economic conditions in coming quarters."
"In the longer term, CPI will decrease."
"There is a risk of CPI staying above target over the duration of the monetary policy horizon."
"Raising rates will reduce inflation expectations."
"The decisions of the MPC in coming months will aim to reduce CPI to target."
"The decisions of the MPC in coming months will support growth."
"In making further decisions, the MPC will consider CPI, labour market and growth."
