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MPC cuts borrowing rate for third month in row

PR dla Zagranicy
Peter Gentle 09.01.2013 17:13
As expected, Poland's National Bank chief Marek Belka announced a cut in interest rates on Wednesday for the third consecutive month, bringing the reference rate down to 4 percent.

Marek Belka, Wednesday after rate cut: photo - PAP Grzegorz Jakubowski

The 0.25 basis point cut results in a lombard rate of 5.50 percent., deposit rate 2.50 percent and rediscount rate 4.25 percent.

The rate-setting Monetary Policy Council (MPC) also cut rates by 0.25 pbs in November and December, as data showed a marked slowing in what had been one of the EU's most dynamic economies.

The MPC noted on Wednesday afternoon that though sentiment in global financial markets has improved recently, supported by a further loosening of monetary policy by major central banks. economic activity in Poland in recent months has slowed.

Production and retail sales have declined and unemployment has risen, though wage growth remains low.

National Bank of Poland governor Marek Belka told journalists that though he would not rule out further cuts to the borrowing rate in February, there maybe a pause in the cycle.

“A round of interest rate cuts is coming to an end: you cannot carry out this policy indefinitely,” he said. (pg)

source: IAR/PAP

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