Policymakers surprise with 100 bps hike as concerns rise over war in neighbouring Ukraine
Seventh rate increase in as many months comes after Bank dismissed concerns the war in Ukraine will drive the Poland into recessionAdam Glapinski, governor of Poland's central bank, in Warsaw, Poland, February 9 2022. Picture: PIOTR MALECKJ/BLOOMBERG
In a surprise decision, policymakers lifted the reference rate by 1 percentage point to 4.5% on Wednesday and repeated that they’ll do whatever it takes to combat persistently high inflation. The size of the hike eclipsed the predictions of the 31 economists surveyed by Bloomberg and came amid mounting concerns that war in neighbouring Ukraine may hurt economic growth.
Poland’s inflation accelerated to 10.9% in March, even as the government cut levies on everything from fuels to food to provide relief to consumers.The monetary policy council “assessed that there is a risk of inflation running persistently above the target within the horizon of the impact of the monetary policy”, it said in a statement after the decision. “The rate increase will also act towards limiting inflation expectations.
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