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Wednesday, May 14, 2008

Poland Inflation April 2008

Poland's inflation rate unexpectedly fell in April, raising the chances the central bank will hold interest rates steady in the coming months. The rate slipped to 4 percent from 4.1 percent in March, according to data from the Central Statistical Office in Warsaw. Consumer prices gained 0.4 percent in the month.

The April result was driven mainly by food price growth of 6.8 percent annually, regulated energy price gains of 7.2 percent and a fuel cost increase of 6 percent.

Slowing inflation adds another argument to keep interest rates unchanged after the Monetary Policy Council paused the tightening cycle last month following seven increases in the benchmark seven-day reference rate, as wages, industrial production and retail sales rose at a slower pace. The key rate now stands at 5.75 percent.

The 10-member Monetary Policy Council have lifted borrowing costs seven times in the past year to counter the effect of rising wages and strong consumption.

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