National Bank of Poland likely to cut rates by 2016-end

The National Bank of Poland’s Monetary Policy Committee’s latest minutes surprisingly indicated that many MPC members are ready to consider lowering interest rate. This is unexpected as individual interviews in recent months inclined to indicate a rather satisfied scenario, with most members of the Monetary Policy Committee maintaining that a tightening labor market and robust growth all but rule out additional monetary easing, noted Commerzbank in a research report.

This seems to have altered after the weaker second quarter economic growth print and dropping PMI in the recent months. Even if the council as a whole still prefers stable rates, many members do not exclude reductions in rate in following quarters any more if growth rate were to continue slowing and deflation to remain.

“Our own base-case is for 50bps lower rates than now by the end of this year”, added Commerzbank.