By www.CentralBankNews.info Poland’s central bank cut its policy rate by 25 basis points to 3.0 percent, as expected by most economists, and will comment on the reason for its decision at a press conference later today.
Last month the National Bank of Poland (NBP) said its rate decisions would hinge on how far inflation fell below the central bank’s target and the state of the economy.
In March Poland’s inflation fell to 1.0 percent, the sixth month in a row of a disinflation, and below the central bank’s range of 1.5-3.5 percent, around a 2.5 percent midpoint.
Poland’s fourth quarter 2012 Gross Domestic Product rose by only 0.1 percent from the third quarter and growth in the full year of 2012 slowed to 1.9 percent from an upwardly revised 4.5 percent in 2011. The NBP has forecast growth slowing further to 1.3 percent this year.
Last November the Polish central bank started cutting rates – a move that was criticised as being too late to counter Europe’s recession – and then froze rates in April to evaluate the impact of the cuts that totaled 150 basis points.
The governor of the NBP, Marek Belka, has said he is counting on an economic rebound but other members of the central bank’s council have described this as wishful thinking.
In addition to the bank’s reference rate, the NBP’s Monetary Policy Council cut the Lombard rate by 25 basis points to 4.50 percent, the deposit rate to 1.5 percent and the rediscount rate to 3.25 percent.
www.CentralBankNews.info
Poland cuts rate 25 bps to 3.0 pct
april presser: “Ultra-low rates or quantitative easing policy…it all leads to significant economic imbalances,” Belka told a news conference. “It is often ineffective.” Belka’s previous roles include heading the International Monetary Fund’s European operations.
Even though the bank said it was leaning towards an easing bias still, Poland’s 10-strong Monetary Policy Council kept its benchmark rate flat at the all-time low of 3.25 percent, as expected, and did not commit to any further rate cuts.
“The economic situation is at a poor level but it is stabilising. We are counting on a rebound,” Belka said.
