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Wednesday, September 26, 2007

Polish Central Bank Leaves Interest Rates Unchanged

The Polish central bank kept its benchmark interest rate unchanged, following three increases this year, stating that it is awaiting more evidence on whether or not inflation is under adequate control.

The Warsaw-based Monetary Policy Council left the seven-day reference rate at 4.75 percent today, following a quarter-point increase last month.

The central bank raised borrowing costs after inflation reached its medium-term target of 2.5 percent in March and exceeded it in June. The annual rate fell to 1.5 percent in August and the zloty has gained 1.3 percent as compared to the euro during September.

Poland's economy expanded an annual 7.4 percent in the first three months of the year and 6.7 percent in the second quarter.

The Polish unemployment rate fell in August to an eight-year low of 12 percent, while average corporate wages rose 10.5 percent in August from a year ago, the fastest pace in almost eight years.

The zloty traded at 3.779 per euro at 1:10 p.m., unchanged after the rate decision and from yesterday. The yield on the government's five-year bond was also unchanged at 5.582 percent.

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