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Polish Central Bank Retains Key Rate For Tenth Time

Poland's central bank on Wednesday decided to keep its key interest rate unchanged for the tenth month in a row. The decision was in line with economists' forecast.

The National Bank of Poland left its reference rate unchanged at 4.50 percent. The bank has been holding the rate steady since mid-2011 when it raised it from an all-time low of 3.5 percent amid concerns over heightened inflationary pressures from strong economic growth.

The central bank also maintained the lombard rate at 6 percent. The deposit and the re-discount rates were left unchanged at 3 percent and 4.75 percent respectively.

Poland's consumer price inflation accelerated to 4.3 percent in February from 4.1 percent in January. Inflation has remained above the 3.5 percent upper end of the central bank's tolerance range since January last year despite economic growth weakening amid the Eurozone debt crisis.

Core consumer prices, excluding food and energy prices, increased 2.6 percent year-on-year in February, faster than the 2.5 percent growth seen in January.

Citing one of its surveys, the central bank last week said that inflation expectations of Polish households for the next 12 months were Lower in March compared to February. The average consumer price inflation is expected to be 4.2 percent in the next twelve months, lower than February's estimate of 5 percent.

In 2011, the Polish economy expanded at the fastest rate in three years. Gross domestic product grew 4.3 percent annually, faster than the previous year's 3.9 percent growth.

by RTTNews Staff Writer

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