The Monetary Policy Council slashed the NBP’s benchmark interest rate by 50 basis points, to 2.00 percent, a new record low. The interest rate had remained at 2.50 percent since July 2013.
The cut had been long awaited, but its size came as a surprise, as most economists had expected the Council to cut the rate by only 25 basis points.
The NBP’s reference rate now stands at 2.00 percent (previously 2.50 percent), the lombard rate at 3.00 percent (previously 4.00 percent), the deposit rate remained at 1.00 percent and the rediscount rate at 2.25 percent (previously 2.75 percent).
“We think that more easing is needed and we expect the NBP to ease monetary policy further in the coming months. However, given the larger rate cut today, the NBP might take a breather before it cuts again. Hence, the NBP might pause in November but it might deliver 25bp in December and more next year,” economists from Danske Bank wrote.