Poland sees declining inflation, economic slowdown: minutes report

By Richard Connell

New York, Feb. 19 - The Monetary Policy Council of the National Bank of Poland, citing a continued economic decline and reduced inflation, cut its reference rate by 75 basis points to 4¼% at its meeting on Jan. 27, according to minutes issued by the bank.

The council pointed out that the global recession and the decline in demand for Polish goods has adversely affected the Polish economy, as indicted by a further fall in industrial output in December.

The council also forecast a continuation of the problems in the global economy, leading to a continued decline in the domestic economy of Poland.

Discussing inflation, the council noted that inflation had fallen to 3.3% in December, within the upper limit for deviations from the inflation target, and forecast it meeting the target level of 2.5% in the coming months.

All council members agreed that monetary policy should be eased in light of the reduced inflationary pressures. While some members were in favor of a more gradual easing of policy, the majority voted for the cut of 75 bps in order to support economic activity in Poland.

The reference rate now stands at 4¼%, the Lombard rate at 5¾%, the deposit rate at 2¾% and the rediscount rate at 4½%.

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