Poland Monetary Policy


Central Bank cuts rates, hints at further easing

At its 6-7 November monetary policy meeting, the National Bank of Poland (NBP) lowered its reference rate by 25 basis points to 4.50%, in a move that was widely expected by the market. The Central Bank confirmed that global economic activity remains weak amid stagnation in the Euro area as well as moderate growth in the United States. On the domestic side, the Bank reiterated that growth continues to slow, which has been confirmed by recent economic data. Regarding price developments, the Central Bank stated that "inflation will return to the target in the coming quarters, and might fall below the target in the medium term". Inflation stabilized in September but remains above the Central Bank's target of 2.5% with a tolerance margin of plus/minus 1.0 percentage points. The Bank adopted a dovish stance, stating that if economic data in the coming months continue to show signs of a slowdown and inflationary pressures remain limited, it will ease monetary policy further. In the same vein, NBP Governor Marek Belka indicated that the chance of another interest rate cut in December was "significant".


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Poland Monetary Policy Chart

Poland Monetary Policy November 2012

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

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