Fewer arguments to support a continuation of easing cycle in Poland: Societe Generale

Quotes from Societe Generale:

- Poland MPC decided to cut all rates by 50bp, with the key rate lowered to 1.50%. Governor Belka confirmed during a press conference that the rate cuts were backed by a 'solid majority'. The MPC decision was not in line with economists' consensus (25bp). We expected two cuts of 25bp each, rather than one 50bp cut. 

- Before March's meeting, some Council members had suggested that there would be gradual adjustments. We do not expect to see a majority of the Council favouring more rate cuts. Indeed, the Council emphasised that this was the end of monetary policy easing and stated in its press statement that the decision to "lower the interest rates at the current meeting concludes the monetary easing cycle."  

- We agree that there will be fewer arguments to support a continuation of the easing cycle in Poland. The statistics base effect will start to impact inflation from March. We expect deflation to continue until Q3 2015.