Poland's central bank keeps rates unchanged

The Polish central bank decided Wednesday to leave its key interest rate unchanged, a move that had been expected by analysts.

The decision by the rate-setting Monetary Policy Council kept the bank's benchmark seven-day intervention rate at 4.5 percent, the discount rate at 4.75 percent, the Lombard rate at 6 percent and the overnight deposit rate at 3 percent.

In a brief statement, the council said it was maintaining its relaxed policy bias. That means the rate-setting panel believes annual inflation, now running at 1.6 percent, is more likely to undershoot than overshoot the central bank's 2.5 percent target through 2007.
Analysts had expected rates to remain unchanged this month because of the uncertainty about the country's economic course in the wake of Sunday's elections for the lower house of parliament.

The socially conservative Law and Justice party was the winner, but is engaged in talks about forming a coalition with the pro-market Civic Platform.

The country's presidential election is scheduled for Oct. 9.

(Source: Business Week)

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