Polish Premier Says Central Bank Increased Rates `Too Late
Polish Prime Minister Donald Tusk said the central bank's rate-setting body waited too long before raising interest rates as inflation accelerated.
“They failed to react quickly enough,'' Tusk said on private broadcaster TVN today. “Interest rates should have been increased earlier than they were.''
Tusk echoed comments by Finance Minister Jacek Rostowski on June 20 that Poland's current rate of inflation was due to “mistaken'' policy at the central bank. The annual inflation rate was 4.4 percent in May, remaining above the central bank's target limit of 3.5 percent for a seventh consecutive month.
While the bank has lifted the benchmark rate seven times since April 2007, to 5.75 percent, the annual inflation rate had reached the central bank's mid-range target of 2.5 percent the month before.
Central bank Governor Slawomir Skrzypek rejected Rostowski's remarks, saying yesterday in a statement published in Gazeta Wyborcza the minister was making the bank responsible for external inflationary elements like grain prices or dairy products over which it had no control easy quick payday loans.
Tusk has been on a collision course with Skrzypek since his government took power in November. Skrzypek, nominated by President Lech Kaczynski, whose brother Jaroslaw heads Poland's biggest opposition party, has spoken out against tightening of monetary policy.
The prime minister said he wouldn't change his “negative opinion'' of Skrzypek's candidate to become deputy governor, Gazeta Wyborcza yesterday cited him as saying.
Tusk refused to approve Witold Kozinski, whom Skrzypek nominated in February after his deputies resigned, after Kozinski said it may be necessary to weaken the zloty in the currency market.