Polish central bankers expect prolonged deflation: Report

WARSAW: Polish central bankers said that deflation could last longer than previously expected, but stopped short of cutting interest rates due to heightened risk aversion on the international markets, minutes from the January meeting showed on Thursday.

"The majority of the members of the council expressed the opinion that leaving interest rates unchanged at the current meeting was justified by the heightened risk aversion in the international financial markets," the minutes said.

At the meeting, the central bankers voted on motions to cut the benchmark interest rate by 100 basis points and 25 basis points, but both motions failed and the rate remained at its all-time low of 2.0 percent.

Earlier this week, the Polish central bank's chief Marek Belka said that rate cuts might be put on hold until after the foreign exchange markets settle from the Swiss central bank's decision to remove a cap on the franc.