MNI NBP WATCH: Poland CenBank Leaves Rates On Hold As Expected

The National Bank of Poland left rates unchanged on Thursday, with the reference rate held at 3.75% following March's 25-basis-point cut, as the impact on inflation of fuel price rises was offset by lower agricultural commodity prices, labour market easing, and stable wage growth. (See MNI EM NBP WATCH: Hold Seen As NBP Pivots Back To 'Wait-And-See')

CPI inflation rose to 3.0% in March from 2.1% in February, the NBP said in a statement, pointing to a surge in fuel prices resulting from the conflict in the Middle East, and a rise in February's retail sales and industrial output in annual terms.

However there was another "marked" decline in construction and assembly production, with employment falling in the enterprise sector, it said, adding that "against this background, the Council decided to keep the NBP interest rates unchanged."

"Further decisions of the Council will depend on incoming information regarding prospects for inflation and economic activity in Poland. These prospects are currently influenced by changes in macroeconomic situation abroad, including changes in global commodity prices and inflation, amid geopolitical context. Fiscal policy and regulation
concerning fuel prices as well as changes in growth of activity in the Polish economy and further developments in wage growth also remain risk factors for inflation outlook."