Bloomberg News

Polish Bonds Gain as Retail-Sales Growth Slows for Third Month

May 25, 2012

Polish bonds advanced after a report showed retail-sales growth slowed for a third month in April, reducing the prospect of another interest rate increase.

They yield on notes maturing in January 2014 fell three basis points to 4.81 percent as of 11:13 a.m. in Warsaw, according to data compiled by Bloomberg. Three-month forward rate agreements, which investors use to bet on changes in borrowing costs, declined two basis points to 5.12 percent.

Retail sales advanced 5.5 percent from a year earlier, the statistics office said today, falling short of a 9.3 percent median estimate in a Bloomberg survey of economists. The central bank this month raised its main interest rate by a quarter of a percentage point and didn’t rule out another increase to curb inflation as it predicted the economy will avoid a steep slowdown.

“The data has supported the positive sentiment on the debt market,” Bank Zachodni WBK SA economists wrote in an e-mailed note to clients. “From the monetary policy’s standpoint, it shows there is no need to raise interest rates further.”

The central bank needs more evidence before raising borrowing costs at its next policy meeting, Monetary Policy Council member Jerzy Hausner said in Warsaw yesterday.

To contact the reporter on this story: Piotr Skolimowski in Warsaw at

To contact the editor responsible for this story: Gavin Serkin at

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