Poland Monetary Policy


Central Bank cuts rates for fourth straight month in February

At its 5-6 February monetary policy meeting, the National Bank of Poland (NBP) lowered its reference rate by 25 basis points to 3.75%, in a decision widely expected by the market. The move marks the fourth consecutive month in which the NBP cuts interest rates.

The Central Bank reiterated that recent "data show that global economic activity remains low" amid stagnation in the Euro area and a decline in economic growth in the United States. On the domestic side, the Bank stated that "as expected, 2012 Q4 saw a further economic slowdown" confirmed by data indicating a decrease in consumer demand and investment as well as a gloomier labour market.

Regarding price developments, the Central Bank indicated that "both core inflation measures and producer price growth continued to decrease, which confirms further weakening of demand and cost pressures in the economy". Inflation fell to 2.4% in December and remains within the Central Bank's target of 2.5% with a tolerance margin of plus/minus 1.0 percentage points.

The Bank maintained its dovish stance, stating that "the decrease in interest rates should support economic activity and reduces the risk of inflation remaining below the target in the medium term".


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Poland Monetary Policy Chart

Poland Monetary Policy February 2013

Note: NBP Reference Rate in %.
Source: National Bank of Poland (NBP).

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