Poland sees economic slowdown, inflation easing: minutes report

By Richard Connell

New York, April 23 - The Monetary Policy Council of the National Bank of Poland, citing a continued economic slowdown, lowered its reference rate by 25 basis points to 3¾% at its meeting on March 25, according to minutes released by the bank.

The council pointed out that the recession in Poland's main trading partners had negatively affected the economy of Poland, as reflected in decreased exports and industrial output.

The council also examined the zloty exchange rate, noting that the previously observed zloty depreciation was a main risk for future price stability.

The council also pointed out that the weakening of the zloty contributed largely to a large rise in inflation in February as compared to January.

However, council members stated that they believed inflation would ease, as a result of the deepening recession in the global economy and decreased domestic demand.

In order to intensify lending and prevent an excessive decline in economic activity, the council cut the reference rate to 3¾%.

The reference rate now stands at 3¾%, the Lombard rate at 5¼%, the deposit rate at 2¼% and the rediscount rate at 4%.

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