National Bank of Poland opts to lower interest rate by 25 bps to 3½%

By Richard Connell

New York, June 24 - The Monetary Council of the National Bank of Poland cut its reference rate by 25 basis points to 3½% at its meeting on Wednesday, according to a news release issued by the bank.

The council pointed out that the GDP declined in the first quarter of 2009 in the majority of E.U. and other developed economies, indicating the global recession was continuing.

The recession affected the economy of Poland, reflected in GDP growth declining to 0.8% on a year-to-year basis, as well as lowered exports and reduced industrial output.

CPI inflation fell in May 2009 to 3.6% after a brief rise, still remaining above both the inflation target of 2½% and the upper limit for deviation of 3½%.

Forecasting that inflation was more likely to run below the inflation target than above in the medium term, the council cut the NBP interest rates by 25 bps.

The reference rate now stands at 3½%, the Lombard rate at 5%, the deposit rate at 2% and the rediscount rate at 3¾%.

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