Chojna-Duch: Rates need to be cut

The National Bank of Poland’s benchmark interest rate should be cut by 50 basis points to 2.00 percent in October, Monetary Policy Council member Elżbieta Chojna-Duch told Reuters. “The Russian embargo on food exports, weakness in the economy and negative readings from the euro zone may prolong the period of deflation,” the central banker said. “This is why in my opinion one should cut rates by 0.5 percentage point in October. A cut by 0.25 percentage point would have been purposeful in June or July. Now the reaction of the MPC should be more decisive, also because of the increased rate disparity with the euro zone.” In the opinion of Chojna-Duch, the council should then wait for the central bank’s November economic projection before it decides what to do next.