Poland lowers reference rate to 1.5%, concluding easing cycle

By Angela McDaniels

Tacoma, Wash., March 4 – National Bank of Poland’s Monetary Policy Council voted to decrease the reference rate to 1.5%, the Lombard rate to 2.5%, the deposit rate to 0.5% and the rediscount rate to 1.75%, according to a news release.

Each rate was decreased by 50 basis points.

The council said its decision took into account prolonging deflation and a significant increase in the risk of inflation remaining below the target in the medium term.

The decision to lower the interest rates at the current meeting, which was held on Tuesday and Wednesday, concludes the bank’s monetary easing cycle, according to the news release.

In Poland, the pace of economic growth in the fourth quarter of 2014 slowed slightly but stayed close to 3%, the council said. The council attributed the stable GDP growth to a further rise in consumer demand and still high, despite some deceleration, investment growth.

Meanwhile, lending growth was stable, and labor market conditions continued to improve. The seasonally adjusted unemployment rate has been declining.

At the same time, the council said the uncertainty about demand outlook continues to contain economic activity in Poland.

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