Bloomberg News

Belka Says Poland Makes Balanced Soft Landing in First Quarter

June 06, 2012

Polish central bank Governor Marek Belka commented today on the outlook for interest rates after the Monetary Policy Council kept the main interest rate at 4.75 percent, matching the forecast of all 35 economists surveyed by Bloomberg.

The following are selected comments from Belka at a news conference in Warsaw following the rate decision.

On first-quarter economic growth slowing to 3.5 percent:

“It hasn’t changed our assessment of the economy. We’re seeing some weakening in consumption, which could have been expected due to weaker employment and wage growth. On the other hand, we have a slowing pace of investment. The first quarter also saw further fiscal consolidation.

“All in all, it’s not a dramatic, but a balanced soft landing of the economy.

“It doesn’t smell of a crisis to me.”

On the zloty:

“It’s hard to speculate about zloty depreciation as it’s totally unpredictable. We could just as easily see weakening due to market turbulence or strengthening.

“I’m not ready to speculate. What I can say though is that the zloty has deviated below its fundamental value and we can expect it to strengthen over the longer term.

“We’ve got a free-floating currency regime. We don’t have an exchange-rate target or a trading band. What I want to stress is that when we saw dynamic changes on the market resulting from some form of speculation, we entered the market, usually in coordination with Bank Gospodarstwa Krajowego, and that calmed down markets.”

On interest rate changes:

“We signaled a rate increase in April, even though some of you didn’t believe us. I don’t read any announcement of a rate increase into today’s statement.”

“The GDP data have confirmed the Council in its conviction that the rate increase was at the right time and on the right scale.”

To contact the reporters on this story: Piotr Skolimowski at

To contact the editor responsible for this story: Balazs Penz at

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