The National Bank of Poland decided Wednesday to hike interest rates by a quarter despite inflation remaining below the central bank's target rate.
The benchmark reference rate is now 4.75%. In July consumer price inflation was 2.3%, 20 basis points below the central bank's 2.5% target.
The central bank said it also expects inflation may fall in the third quarter. But a build-up of wage pressure would cause inflation to rise in the medium term unless productivity rose and global prices fell,