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Signals on Polish interest rate changes unlikely before July: central banker

WARSAW (Reuters) - Poland's central bank is unlikely to give signals on future changes in its record low interest rates before July, when new economic forecasts are published, a policymaker said.

The bank has kept rates at 1.5 percent for 22 months as inflation has held well below its 2.5 percent target, also giving itself leeway for further cuts in case of external economic shocks.

"Forecasts for 2018, when the base effect (of low inflation) will fade, will be key," Monetary Policy Council (MPC) member Kamil Zubelewicz said in an interview with Reuters published on Monday.

"During the presentation of the July projection one could think about the date and scale of potential interest rate changes."

Central bank governor Adam Glapinski said in mid-January that rates may be hiked in 2018 if economic growth accelerates, outlining the consensus view on the 10-member MPC.

Zubelewicz said his base scenario was for unchanged rates for the rest of 2017. However, they might rise this year if net inflation picked up significantly.

After mostly holding below zero in 2016, CPI inflation accelerated to 0.8 percent in December, and economists expect economic growth to pick up too from the 2.5 percent posted in the third quarter.

Zubelewicz said he expected the year-on-year rise in CPI to reach 1.5 percent by mid-year.

"From the point of view the (council's) long-term policy, the current scale of price increase may turn out temporary," he said.

"... At the same time one cannot miss the moment when inflation will have to be stemmed so that it does not exceed the target."

(Reporting by Paweł Sobczak and Pawel Florkiewicz; writing by Marcin Goclowski; editing by John Stonestreet)

 

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