Polish central bank's freedom threatened

Source: AFP

Polish Central Bank Governor Leszek Balcerowicz says the bank's independence is "threatened" by an amendment adopted a day earlier by the parliament's finance committee.

"I am very worried following the adoption yesterday by the committee on public finances of an amendment that would oblige the national bank of Poland (NBP) to print money. It is a threat to its very independence," he said.

Balcerowicz, a former finance minister and the main architect of Poland's post-Communist reforms, said the left-dominated parliament was trying to oblige the bank to free part of its re-evaluation reserve.

"A central bank should be independent, exactly in order to defend a healthy currency, without being obliged to print money," he said.

On Wednesday the bank decided to keep its basic interest rates unchanged.

"There is no justification for reducing the rates in the near future because the recovery of the Polish economy which has been in evidence for the past few months risks creating a new inflationary pressure," he said.