No immediate rate cut predicted despite record low inflation in January

Year-on-year inflation fell to a post-1989 record low of 3.5% in January, su rprising analysts who had been predicting the year would open with a small i ncrease. The markets reacted with a strengthening of the zloty, in anticipat ion of another interest rate cut. However, analysts are skeptical about the possibility of such a decision by the Monetary Policy Council (RPP) at its n ext meeting, scheduled for February 27 and 28. A reduction is more likely to take place in March, analysts say, and predict it will probably be 1 or 1.5 points. Despite the low figure in January, inflation is expected to rise sli ghtly in the coming months, reaching 4.2% in March, according to Michal Dybu la from BNP Paribas. (Gazeta Wyborcza, Feb.16-17, p. 23) T.J.