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Poland raises interest rates again as inflation surges

04.01.2022 20:15
The Polish central bank’s Monetary Policy Council on Tuesday raised key interest rates for the fourth time in as many months in a bid to tame surging consumer prices.
Image by Henryk Niestrój from Pixabay
Image by Henryk Niestrój from Pixabay Pixabay License

The reference rate went up by 50 basis points to 2.25 percent, from 1.75 percent, amid rising inflation, which hit 7.8 percent in November, state news agency PAP reported.

The move came after central bank chief Adam Glapiński told a conference in October that the time was coming for “a monetary adjustment.”

Polish central bank chief Adam Glapiński. Polish central bank chief Adam Glapiński. Photo: PAP/Wojciech Olkuśnik

Polish Prime Minister Mateusz Morawiecki said at the time he expected “an appropriate response” from the central bank to the fastest price growth in the country in two decades.

Poland's rate-setters in October pushed the reference rate to 0.5 percent from 0.1 percent in the country's first rate hike since 2012. Less than a month later the benchmark rate was increased further to 1.25 percent, followed by a further rise to 1.75 percent in December.

Inflation in Poland stood at 7.8 percent in year-on-year terms in November, hitting the highest level this century, the country’s Central Statistical Office (GUS) said in a final estimate in the middle of last month.

The Polish central bank expects that inflation in the country will average 7.6 percent in 2022, rising from 2021, Glapiński was quoted as saying at the end of December.

The Polish government is preparing new measures to offset the impact of rising prices of gas and electricity for citizens, spokesman Piotr Müller said on Monday.

(gs)

Source: PAP