* Belka says may be temporary volatility after Fed tapering
* New decision on Polish rates guidance possible in March
* Polish economy clearly accelerating, no deflation risk (Adds Belka’s comments, details)
By Sarah Marsh
BERLIN, Dec 12 (Reuters) - A reduction in U.S. monetary stimulus has already been priced in by markets, the head of Poland’s central bank said on Thursday, and any effect on Polish bonds and currency should be limited.
Speaking in Berlin, Governor Marek Belka also said economic forecasts due in March from the Polish central bank would provide support for deciding on future rate guidance.
A massive bond-buying programme by the U.S. Federal Reserve has supported riskier assets around the globe. Now investors are getting ready for the moment the Fed starts scaling back.
The first time the Fed mentioned tapering off, in June, many emerging-market currencies plunged, especially in countries with high current-account deficits. Emerging-market bond yields soared. Polish stocks suffered heavy losses. This time, Belka said, the reaction should be more subdued.
“We may see some transitory movements, maybe on the exchange rate or sovereign papers, but really transitory,” Belka told Reuters in Berlin. “Not anything that would worry us too much.”
Wall Street expects the Fed to start reducing its bond-buying no later than March. Some expect action as early as next week, after two straight months of robust U.S. jobs gains.
Belka said the Polish economy, eastern Europe’s largest, is accelerating and there was no risk of deflation. Last week, the central bank said it would stick to its plan to leave rates on hold until at least the middle of 2014, resisting the temptation to match cuts by the euro zone, Hungary and the Czech Republic.
Headline inflation in Poland eased to an annual 0.8 percent in October, far below the bank’s 2.5 percent target. Analysts expect only a slight rise in November.
However, core inflation, at 1.4 percent, was “quite stubborn”, Belka said, suggesting underlying price growth was greater than the headline figure would suggest.
“If we look at longer-term inflation expectations, we are closer to the target ... and what is probably more important is that we see the economy speeding up,” Belka said. (Reporting by Sarah Marsh; Writing by Marcin Goettig; Editing by)