Narodowy Bank

March 6, 2013

The National Bank of Poland’s reference interest rate was cut today to 3.25% from 3.75%.  Reductions of 25 basis points each were implemented earlier in November, December, January and February.  The rate had been lifted between January 2011 and May 2012 by 125 bps in all to 4.75%.

The statement of explanation accompanying today’s decision observes a deficient rate of economic growth, no wage pressure and falling inflation of 1.7% versus 2.8% three months earlier and a medium-term target of 2.5%.  New growth and price forecasts are unveiled that depict continuing moderate growth and a period of time before inflation rises back to target.  The statement is ambivalent about future rate cuts:

Considering the risk of inflation running below the NBP inflation target in the medium term, the Council decided to lower the NBP interest rates further. The March decision complements the monetary policy easing cycle commenced in November 2012.  In the opinion of the Council, 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.

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

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