Poland's Monetary Policy Council (MPC) remains in a tightening mode because high inflation could fuel and cement inflationary expectations, MPC member Andrzej Slawinski said on Tuesday.
"The Polish central bank is in a phase in which it aims to tighten monetary policy," Slawinski told TVN CNBC.
"If this (high inflation) remains, it could mean that inflationary expectations could be cemented," said Slawinski, seen as a key swing voter on the 10-member council.
Inflation stood at 4.4 percent year-on-year in May, its highest level since December 2004 and well above the central bank's 2.5 percent target. Economists expect the MPC to raise rates by 25 basis points to 6.0 percent later this month.
Wages in May rose by 10.5 percent year-on-year to 3,069 zlotys ($1,391) per month, statistics office data showed on Monday. Analysts polled by Reuters had forecast an 11.5 percent year-on-year increase.
Slawinski said wage growth at 7 percent year-on-year would be neutral for the central bank, adding that the length of the tightening cycle would hinge on wage growth and also the zloty.
The zloty has appreciated strongly against major currencies over the past year, helping to contain inflationary pressures.
"(The tightening cycle will continue) until inflation is brought back to target," Slawinski later told TOK FM radio.
The MPC began its current monetary tightening cycle in April 2007 in the face of accelerating inflation and soaring wages.
The expected June rate hike would be the eighth increase and some analysts say the MPC may raise rates further after that.
(Writing by Dagmara Leszkowicz; Editing by Gerrard Raven)
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