Poland: Monetary Policy

Background:

The primary objective of the National Bank of Poland (NBP) is to maintain price stability. The secondary objective is to act in support of government economic policies, insofar as this does not constrain pursuit of the NBP's primary objective.

Poland has an inflation targeting regime. Having brought inflation down to a low level, the Monetary Policy Council in 2004 adopted a permanent inflation target of 2.5% with a tolerance band for deviations of +/- 1 percentage point. The MPC pursues inflation targeting under a floating exchange rate regime. However, the floating exchange rate regime does not rule out foreign exchange interventions when necessary to ensure domestic macroeconomic and financial stability.