Poland Monetary Policy


Central Bank lowers policy rate for fifth month in a row

At its 5-6 March monetary policy meeting, the National Bank of Poland (NBP) lowered its reference rate by 50 basis points to a record low of 3.25%. The decision surprised the market, as most analysts had expected a 25-basis-point cut, and marks the fifth consecutive month in which the NBP cuts interest rates.

The Central Bank reiterated that "incoming data show that the global economic activity remains low" amid stagnation in the Euro area and a near-flat growth in the United States in the last quarter of 2012. On the domestic side, the Bank stated that recent GDP growth figures confirmed a "marked economic slowdown", underpinned by weak consumer demand and investment, and that growth is poised to remain low in early 2013.

Regarding price developments, the Central Bank indicated that there are currently "no wage pressures and low inflationary pressure". Indeed, inflation fell to its lowest level in more than five years in January.

Finally, the Bank added that "considerable monetary policy easing in recent months and at the March meeting will allow inflation to run close to target in the medium term and at the same time supports recovery of the Polish economy".

FocusEconomics Consensus Forecast panellists expect the NBP reference rate to end this year at 3.48%. For 2014, panellists expect the policy rate to end the year at 3.79%.


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Poland Monetary Policy Chart

Poland Monetary Policy March 2013

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

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