By Central Bank News
The central bank of Poland cut is benchmark reference rate by 25 basis points to 4.50 percent, as expected, with the economy continuing to weaken.
The National Bank of Poland (NBP), which had raised it rate in May to push back inflation, would explain its decision later today at a press conference.
The central bank also cut its lombard rate by 25 basis points to 6.0 percent, the deposit rate to 3.0 percent and the rediscount rate to 4.75 percent.
Poland’s economy has gradually been losing steam this year due to the euro area’s debt crises and recession. Poland’s Gross Domestic Product expanded by 2.5 percent in the second quarter, down from growth of 3.5 percent in the first quarter and 4.2 percent in the fourth quarter.
The inflation rate remained steady at 3.8 percent in September and last month the NBP said it would cut rates if data confirmed that the economy continued to slow down and there were limited inflationary pressure even if it expects inflation to remain above its 2.5 percent target during the rest of this year.
Since that meeting, several Polish central bankers, including the governor, have indicated they were favoring a rate cut.
