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Polish Central Bank Cuts Interest Rates Further Amid Slowing Growth

2/6/2013 8:22 AM ET

Poland's central bank on Wednesday lowered its policy interest rate for the fourth time in a row after economic growth slowed significantly last year and consumer price inflation remained below target. The decision was in line with economists' expectations.

The National Bank of Poland lowered its benchmark interest rate by 25 basis points to 3.75 percent, after enacting similar reductions at the previous three meetings. The bank also lowered the rediscount rate by 25 basis points to 4 percent, and the deposit rate to 2.25 percent. The lombard rate was also slashed by 25 basis points to 5.25 percent.

Poland's headline consumer price inflation weakened further to to 2.4 percent in December from 2.8 percent in November and 3.4 percent in October, and stayed below the central bank's target. Core inflation weakened to a two-year low of 1.4 percent from 1.7 percent in November.

Last year, Poland's economic growth nearly halved to 2 percent from 4.3 percent in 2011. In the third quarter, the economy expanded at a significantly slower rate of 1.4 percent annually than second quarter's 2.3 percent.

by RTT Staff Writer

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