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Polish monetary policymaker says low interest rates risky
December 8, 2014 / 7:03 AM / 3 years ago

Polish monetary policymaker says low interest rates risky

WARSAW, Dec 8 (Reuters) - Polish Monetary Council (MPC) member Jan Winiecki said the council’s main interest rate was too low at the current 2.0 percent and should be 2.5 percent to 3.0 percent.

He was quoted in Bloomberg Businessweek Polish edition on Monday saying that generally cheap credit may encourage people to take on too much risk.

“I stopped voting for further cuts a few months ago...(An) interest rate - with inflation at zero level - around 2.5 to 3 percent is appropriate,” Winiecki said.

The Polish Monetary Policy Council decided earlier in December to keep the policy rate at 2.0 percent, its lowest level in history, as economic growth was still robust and inflation hovered below zero.

Winiecki said the next MPC will need to consider whether a policy of direct inflation-targetting is effective. The present MPC, whose term ends in around a year’s time, targets inflation at 2.5 percent.

Poish central banker Elzbieta Chojna-Duch said earlier falling consumer prices were mostly due to lower global energy prices and did not require policy changes.

Reporting by Marcin Goclowski; Editing by Eric Meijer

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