Poland Monetary Policy


Poland: Central Bank cuts rates, ends policy easing cycle in July

July 3, 2013

At its 2-3 July monetary policy meeting, the National Bank of Poland (NBP) cut its reference rate by 25 basis points to a record low of 2.50%, in a decision that was in line with market expectations. Overall, since the beginning of the easing cycle in November last year, the NBP has cut an accumulated 225 basis points off the reference rate. However, the Bank announced that its "decision to lower NBP interest rates made at the current meeting ends the loosening cycle of monetary policy".

The Central Bank stated that global economic activity remains weak amid a recession in the Euro area as well as slowing growth in some major developing economies, in particular China. On the domestic side, the Bank stated that economic growth has been weak in the second quarter. Regarding price developments, the Central Bank indicated that there are "persistently low demand and cost pressures in the economy". Indeed, inflation fell to 0.5% in May, which is well below the Central Bank's target of 2.5% plus/minus 1.0 percentage point.

Finally, the NBP concluded that the "significant reduction of NBP interest rates implemented since November 2012 supports economic recovery and limits the risk of inflation running below the NBP target in the medium term".

FocusEconomics Consensus Forecast panellists expect the NBP reference rate to end this year at 2.53%. For 2014, panellists expect the policy rate to end the year at 3.01%.


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Poland Monetary Policy Chart

Poland Monetary Policy July 2013

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

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