Bloomberg News

Polish President Picks Osiatynski for Rate Policy Panel (1)

December 20, 2013

Polish President Bronislaw Komorowski chose Jerzy Osiatynski, his senior economic adviser, to fill a vacant seat on the central bank’s rate panel.

Osiatynski, Poland’s finance minister in 1992-1993 and a former World Bank consultant, will join the 10-person Monetary Policy Council for a six-year term, replacing Zyta Gilowska, who resigned in October.

Policy makers reiterated this month that interest rates may remain at a record low beyond mid-2014 to help energize a recovery in the European Union’s largest eastern economy. The council led by Governor Marek Belka cut borrowing costs by 2.25 percentage points between November and July as economic growth slowed to the weakest in more than a decade and inflation held below the central bank’s 2.5 percent target for 11 months.

It’s “hard to expect” inflation pressure with the output gap and unemployment at current levels, Osiatynski said today in an interview with TVN CNBC, declining to comment on the current level of interest rates. The economy may grow 3.2 percent in 2014, he said, rejecting interest-rate cuts as the best tool to prop up private investment.

The zloty traded at 4.159 per euro at 4:45 p.m. in Warsaw, little changed from yesterday, when it appreciated to its strongest since Nov. 7. Yields on two-year government debt fell 1 basis point to 3 percent.

‘Softer’ Policy

“The appointment won’t impact market expectations on interest rates,” Jaroslaw Janecki, chief economist for Poland at Societe Generale SA, said by phone from Warsaw. “Osiatynski will support a softer monetary policy than Gilowska, which is also expected by the market.”

Osiatynski sees “ensuring full employment” as “a major issue and a key challenge” for Poland, according to an interview with the Krytyka Polityczna website in August.

He edited the collected writings of Michal Kalecki, a Polish economist whose work on the role of investment in economic cycles anticipated John Maynard Keynes’s analysis in “The General Theory of Employment, Interest and Money,” published in 1933.

“Keeping rates steady as long as possible would be highly desirable,” Osiatynski said in a Nov. 27 interview with the state news service PAP.

In July, he backed the government’s decision to lift a 50 percent safeguard threshold on the ratio of public debt to gross domestic product, making it possible to widen this year’s budget deficit. The economy would “almost grind to a halt” if “radical” spending cuts were applied, according to his comments for Krytyka Polityczna.

Poland’s central bank was the only one in the EU to raise rates last year, after which it embarked on the current easing cycle. The rate panel will hold its next rate meeting Jan. 7-8.

“Osiatynski will bring extensive economic and political experience,” central banker Elzbieta Chojna-Duch said today in an interview with TVN CNBC. “Room for moves on Polish interest rates is limited next year.”

To contact the reporters on this story: Dorota Bartyzel in Warsaw at; Konrad Krasuski in Warsaw at

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

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