Poland central bank raises rates again

Banking

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Poland's central bank raised interest rates for a second time this year, citing the risk of high inflation that could hurt the economic recovery, according to a report by Polish Radio.

The National Bank of Poland raised its benchmark reference rate by 50 basis points to 2.75% from 2.25%. The previous change in the rate was a 50 basis points hike in January.

Meanwhile, the Lombard rate was increased to 3.25% and the rediscount rate was hiked to 2.8%.

"In a longer perspective, inflation will decrease, which will be supported by expected fading of some global shocks currently boosting price growth, as well as by an increase in the NBP interest rates," the central bank said. "At the same time, amidst further economic recovery and expected continuation of favorable labor market conditions, as well as probably more lasting impact of external shocks on price dynamics, there persists a risk of inflation running above the NBP inflation target in the monetary policy transmission horizon."

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