Poland is very likely to have higher interest rates by the end of 2010, a new member of the central bank's Monetary Policy Council (MPC), Andrzej Rzonca, said on Monday, adding he preferred small moves.

Asked if he agreed that rates would definitely be higher at the end of the year, Rzonca told radio PiN in an interview:

'I think it's very probable... It's better to make smaller changes more often than rare jumps.'

Poland's main interest rate stands at an all-time low of 3.5 percent and analysts expect no moves in the first half of 2010. But some say consumer prices may pick up as the economy rebounds. Poland's 2010 economic growth is seen at 2.6 percent.

The Polish central bank targets inflation at 2.5 percent. It stood at 3.5 percent year-on-year in December and was within the target's upper band of 3.5 percent.

Rzonca reiterated that he believed inflation would ease to the target and possibly dip below it during the first six months of the year but that swifter rate hikes would be needed if that did not happen.

[ Read the rest ... ]

slawomir skrzypek