Economics
Boring Is Beautiful as Belka Seeks to Lull Market
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Poland’s central bank Governor Marek Belka is keeping mum about the future path of interest rates, seeking to prevent traders from prematurely betting on higher borrowing costs and squeezing the nascent economic recovery.
“We’re definitely not going to let the markets get too used to anything, to playing games either for rate cuts or for increases,” Belka told reporters yesterday after policy makers kept the benchmark rate at a record low 2.5 percent for an eighth month. Forward-rate agreements, used to bet on borrowing costs, show traders predicting a quarter-point jump by October, data compiled by Bloomberg show. The extra yield on 10-year bonds over German bunds set a 14-month high last week.