National Bank of Poland Eases Again

February 6, 2013

The Monetary Policy Council announced its fourth reference rate cut of 25 basis points since November.  The new rate, 3.75%, is just 25 bps above its trough of 3.5% prior to 2011.  In defending today’s decision, officials declared that

The decrease in interest rates should support economic activity and reduces the risk of inflation remaining below the target in the medium term.

A statement released by the policy council notes that the pronounced slowdown of activity in the third quarter of 2012 appears to have intensified further last quarter.  There has also been a slowdown of CPI inflation from 3.4% in October to 2.4% at yearend, which is below the 2.5% target.  Officials see limited wage and price pressure ahead and have observed a drop in expected inflation among households.  Core inflation is below 1.5%.  The Council’s next interest rate announcement is scheduled for four weeks from today.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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