January 10, 2018 / 4:54 PM / a year ago

UPDATE 1-Polish c.bank head says interest rates may stay unchanged into 2019

(Adds quotes and background)

WARSAW, Jan 10 (Reuters) - Interest rates in Poland may stay unchanged at 1.5 percent until the end of 2018 or even longer, as inflation is benign despite fast economic growth, the head of the Polish central bank said on Wednesday.

Adam Glapinski’s comments appeared to suggest a longer horizon for a shift in interest rates than the bank had previously signalled.

Earlier in the day, the Monetary Policy Council left rates unchanged, as expected, and said in a statement that economic growth may slow in coming quarters, while earlier it had expected a slowdown in coming years.

“In my opinion, rates will stay unchanged until the end of 2018 ... perhaps even longer,” Glapinski told a press conference. He declined to say how long into 2019 the policy of holding rates might extend.

“We’re not going to do anything original. There is a disparity in rates (between Poland and other countries) at around 2 percent and nothing will be changed here,” he said.

Despite expectations that growth in gross domestic product had exceeded an annual rate of 5 percent in the last quarter of 2017, Poland’s inflation slowed in December to 2.0 percent. The central bank’s target is 2.5 percent plus or minus one percentage point.

Glapinski said prices in Poland were under control because of the effects of globalisation.

The zloty currency did not react to the central bank governor’s comments. It was already slightly losing steam this week in anticipation of dovish Glapinski remarks after a short stint of strength last week. (Reporting by Pawel Sobczak; Writing by Lidia Kelly; Editing by Peter Graff)

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