Interest rates cut by 50bp - and further reduction could be as soon as next month

Currently the basic rate of the National Bank of Poland amounts to 6.0%. The majority of analysts expected this move, but despite that yield rate of bonds and the domestic currency increased their value. According to analysts, the rate will fall by a further 0.75% over the forthcoming year, with the next cuts expected as early as April or May. The result of the RPP decision is an expected lowering of interest on loans and deposits. The move followed the CPI drop to 3.6% in February. "Inflation in the second half of the year should fall below 2%," said Leszek Balcerowicz, chairman of the NBP. Some economists are even more optimistic and envisage that CPI could fall below 1%. "RPP is trying to make up for the mistake, which was to increase the rates last year," said Wojciech Kuryłek, chief economist with Kredyt Bank. (Rzeczpospolita, pp. A1, B1) M.M.