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The Warsaw Voice » Business » December 3, 2008
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Interest Rates Down
December 3, 2008 By A.R.    
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Poland's Monetary Policy Council (RPP) cut interest rates by 25 basis points effective Nov. 27. The central bank's reference-or intervention-rate now stands at 5.75 percent; the Lombard rate is 7.25 percent, the rediscount rate runs at 6 percent; and the deposit rate is 4.25 percent.

The RPP decided that the danger of high inflation was diminishing due to a global economic slowdown and that the probability of inflation falling below the central bank's 2.5 percent target within two years was now higher than the probability of it staying above the target. The previous reduction in interest rates was in February 2006. Then the council began to increase the rates-by a total of 175 basis points.

Some economists say the council's latest decision marks the beginning of a round of rate cuts in response to slower economic growth. But others say it is difficult to predict if and when the rates will be cut and by how much.

"The international situation is so changeable that it is almost impossible to project the future interest rate path," said the RPP's Stanisław Owsiak.
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