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Poland’s Central Bank Cuts Interest Rates, Zloty Weakens vs. Dollar

March 4, 2015 at 20:52 by Vladimir Vyun

Many 200-zloty notesPoland’s central bank decided to perform an interest rate cut today, reducing all of its borrowing costs by half of a percentage point. Such decision resulted in a drop of the Polish zloty against the US dollar. The currency was still stronger than the euro.

The National Bank of Poland cut its interest rates by 0.5 percentage point, meaning that the reference rate stands at 1.5 percent now. The size of the cut was bigger than most market analysts anticipated. The NBP stated:

Taking into account prolonging deflation and a significant increase in risk of inflation remaining below the target in the medium term, as indicated by the March projection, the Council decided to decrease NBP interest rates. Decision to lower the interest rates at the current meeting concludes the monetary easing cycle.

USD/PLN rose from 3.7299 to 3.7470 as of 20:51 GMT today, climbing as high as 3.7666 intraday. At the same time, EUR/PLN declined from 4.1687 to 4.1496.

If you have any questions, comments, or opinions regarding the Polish Zloty, feel free to post them using the commentary form below.

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