Polish Central Bank Raises Main Interest Rate to 6.50%

Poland's central bank raised its main interest rate by 50 basis points to 6.50% on Thursday, it said, delivering a hike below analysts' estimates as it balances the risks of an economic slowdown against surging inflation, Reuters reported. Some economists think Poland could tip into technical recession this year, but with inflation running hot most say further tightening is inescapable. "I believe that it is a very sensible decision from the MPC," said Piotr Bujak, chief economist at PKO BP. "If the zloty is persistently under excessive pressure, with negative implications for the medium-term inflation outlook, there will still be a possibility to react. Reacting to the threat of recession would be much more difficult." The zloty weakened after the decision, but was 0.33% firmer against the euro at 1349 GMT. Read more.