Poland Monetary Policy


Poland: Central Bank lowers policy rate unexpectedly to new record low

May 8, 2013

At its 7-8 May monetary policy meeting, the National Bank of Poland (NBP) lowered its reference rate by 25 basis points to a record low of 3.00%. The decision defied market expectations, which had the Central Bank leaving the policy rate unchanged. Overall, since the beginning of the easing cycle in November last year, the NBP has cut an accumulated 175 basis points off the reference rate.

The Central Bank reiterated that global economic activity remains weak amid a recession in the Euro area. On the domestic side, the Bank stated that economic growth also remains weak in Poland. Regarding price developments, the Central Bank indicated that there are "weak demand and cost pressures in the economy". Indeed, inflation fell to 1.0% in March, which is well below the Central Bank's target of 2.5% plus/minus 1.0 percentage point.

Finally, the NBP left the door open for further rate cuts depending on the evolution of prices, stating that "the Council's decisions in the coming months will depend on the assessment of the incoming data with regard to probability of inflation remaining markedly below the NBP target in the medium term".

FocusEconomics Consensus Forecast panellists expect the NBP reference rate to end this year at 3.22%. For 2014, panellists expect the policy rate to end the year at 3.54%.


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

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