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Poland hikes interest rates again as Russian invasion of Ukraine fuels inflation

08.03.2022 18:20
The Polish central bank’s Monetary Policy Council on Tuesday increased interest rates for the sixth time in succession amid rising consumer prices. 
The Polish central banks Monetary Policy Council on Tuesday increased interest rates for the sixth time in succession amid rising consumer prices.
The Polish central bank’s Monetary Policy Council on Tuesday increased interest rates for the sixth time in succession amid rising consumer prices. PAP/Leszek Szymański

The interest rates were raised by three quarters of a percentage point, with the key reference rate now standing at 3.5 percent, the state PAP news agency reported.

It marks the sixth consecutive hike since October, with inflation having reached 9.2 percent in January and expected to remain high amid the Russian attack on Ukraine.

“In 2022, inflation will remain significantly elevated,” Poland’s rate-setting body said in a statement, “additionally fuelled by the economic consequences of  the Russian invasion of Ukraine.” 

The Monetary Policy Council added that inflation would fall in the coming years, as the factors currently pushing prices high lose significance.

This trend should be helped by the strengthening of the Polish zloty, with the current market pressures to depreciate the currency having “no basis in the fundamentals of the Polish economy,” the rate-setters said.

(pm)

Source: PAP, IAR