Poland’s central bank slowed the pace of interest-rate increases as it shifts focus from fighting inflation to preventing an economic downturn.
(Bloomberg) — Poland’s central bank slowed the pace of interest-rate increases as it shifts focus from fighting inflation to preventing an economic downturn.
Policy makers lifted the benchmark rate by 25 basis points to 6.75% on Wednesday, as expected by most economists in a Bloomberg survey. The 11th straight increase follows half a percentage point hike in July and a report showing the economy contracted in the second quarter.
The zloty traded little changed at 4.7287 per euro at 3:22 p.m. in Warsaw.
Polish central bank Governor Adam Glapinski said last week rates will rise once or twice more and only in quarter percentage point steps. While inflation remains at the highest level in almost 26 years, he expects it to start edging lower in the coming months as the economy cools.
Glapinski will present the decision at a news conference at 3 p.m. on Thursday. The central bank will be reluctant to announce the end of the tightening cycle until it has more clarity on energy prices and the scale of support the government will offer households next year, he has said.
Gross domestic product dropped in the second quarter by 2.3% from the previous three-month period and a manufacturing gauge fell for the fourth straight months.
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