Easing Inflation Supports Interest Rate Hiatus

We hold to our view that Polish monetary policy rates will remain on hold in the coming months given the continued moderation in headline inflation. For the time being we still forecast a cumulative 50bps in interest rate hikes by end-2010, though warn that further disinflation poses a risk to this forecast. Either way, we still expect a marked elevation in inflationary pressures over the medium term, which will usher in a period of monetary tightening

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