By www.CentralBankNews.info Poland’s central bank cut its key reference rate by 25 basis points to 4.0 percent, as expected, along with its other interest rates and will provide further details about its decision later today.
It is the third consecutive rate cut by the National Bank of Poland (NBP), which cut rates by 50 basis points in 2012.
Poland’s economy worsened steadily through 2012 and practically all economists had expected the central bank to continue to ease its policy stance today with many expecting it to cut further next month.
In December, the NBP said it would continue to lower its interest rates if the economic slowdown is protracted and inflationary pressures remain limited.
Poland’s third quarter Gross Domestic Product rose by only 0.4 percent from the second, with the annual growth rate falling to 1.4 percent from 2.5 percent in the third quarter and 3.5 percent in the first quarter. The country’s GDP rose by 4.3 percent in 2011.
Poland’s inflation rate fell to 2.8 percent in November from 3.4 percent in October and 3.9 percent in September. The central bank targets inflation of 2.5 percent, plus/minus one percentage point, and expects the target to be reached this year. In 2014 inflation is forecast to drop further to 1.5 percent.
Last month the NBP cut its 2012 growth forecast to 2-2.6 percent from 2011’s 4.3 percent in 2011, and forecast growth this year of 1.5 percent.
In addition to the 25 basis point cut in the reference rate, Poland’s central bank cut its lombard rate to 5.50 percent, the deposit rate to 2.50 percent and the rediscount rate to 4.25 percent.
