Monetary policy makers trim another100 basis points off key interest rates

The Monetary Policy Council (RPP) decided yesterday during its monthly meeting to cut its three key interest rates by 100 basis points to between 17% and 21%, surprising some analysts who had expected the ten-member council to wait with another cut until April to ensure the country's budget is under control and to confirm that inflation is still headed northward. "Generally, the market expected [the RPP] to wait with another cut for another month after a reduction in February. But some took into consideration a slight rate cut today, so the decision should not have a strong impact on the market," said Monika Kubik-Kwiatkowska, an analyst at Standard&Poor's MMS in Frankfurt. She said total interest rate cuts for the year could total as much as 400 basis points, with another one due in the second quarter of this year. The RPP said it had based its decision to trim rates on better-than-expected CPI results, which reached 6.0% in March. "We are pleased with the fall in inflation and we see factors contributing to its further decrease," said NBP head Leszek Balcerowicz. (Gazeta Wyborcza, p.1; Parkiet, p.1; Prawo i Gospodarka, p.1; Reuters) J.K.