Monetary policy interest rates stay put

The main central banks in Central and Eastern Europe and the European Central Bank have preserved interest rates at the latest round of monetary policy meetings, with the NBR (National Bank of Romania) continuing to operate the highest interest rate in the EU (10.25%), in line with the above 8% inflation. The decisions have been made amid an intensification of the international financial crisis. The Bank of Hungary, which has the second-largest interest rate after the NBR – 8.5%, said that a reduction by a quarter of a percentage point had been considered in the board meeting, but that ultimately, the vote ruled overwhelmingly in favour of preserving the rate. The Bank of Poland has also left the interest rate unchanged, at 6% a year for the third month running, in line with market expectations, amid an unexpectedly low inflation in August. However, analysts believe the wide gap between the salary increase and work productivity is likely to spur a vigilant monetary policy, especially with core inflation having continued to rise.