Poland cuts interest rates to record low

Poland’s National Bank of Poland has cut interest rates to a historic low as the economy continues to slow and inflation is below target. The bank’s Monetary Policy Council reduced the key rate by 25 basis points to 3%, and bank Governor Marek Belka said he was not ruling out more cuts. While Wednesday’s decision should not be treated as the start of a new rate-cutting cycle, “I think that we are still leaning towards an easing stance,” he told a news conference. Ratesetters had declared a pause in a cumulative 1.5 percentage points of cuts after a reduction in March, but recent data has suggested prospects of a near-term economic recovery are slim. The European Commission has forecast economic growth of 1.2% for this year, which would be the lowest rate of growth for Poland since 2001.

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