Monetary Policy

The aim of monetary policy conducted by the National Bank of Poland (NBP) is lowering inflation, and in the longer-term, stabilisation of prices, essential to building lasting foundations for economic growth. The NBP has had a "direct inflation targeting strategy" since 1999. The NBP sets the inflation target within the Lisbon framework and then adjusts the level of official interest rates to maximise the chances of achieving it. The NBP maintains interest rates in line with realising the inflationary target, influencing, in turn, the rate of nominal rates on the money markets. Interest rates on the money markets are split between loans and deposits in commercial banks.

The instruments used by the NBP, such as open market operations, reserve obligations and credit financing, allow for a responsible shaping of market interest rates.

The NBP has the exclusive right to issue bank notes and it determines when and how much cash it pumps into circulation. Like every central bank, it also influences the domestic currency. However, since April 12, 2000, the zloty has been an exchangeable currency with no controls on it. The central bank sets no upper limits to the strengthening of the zloty against other currencies on the currency market, though does reserve the right to intervene when it sees a possible threat to realising the inflation target. 

The policies of the NBP have been praised from abroad. The European Commission, for example, preparing its annual report on the preparedness of candidate countries for EU accession, praised the Polish central bank for its role in lowering inflation and for its flexible monetary policies.

Main economic indicators: 

• GDP: 3,6 PKB 

• Inflation: 0,7 % 

• Unemployment rate: 17,8 % (July 2003)

• Average salary in business: 520,6 Euro

• Mobile users coverage: 40 %

More information at: www.mf.gov.pl , www.mg.gov.pl

source: www.poland.gov.pl