Poland's central bank cut its reference policy rate by a deeper-than-expected 50 basis points to 3.25 percent and said it would explain the reason for its third rate cut this year at a press conference later today.
The National Bank of Poland (NBP), which has cut rates by 100 basis points this year following a reduction of 50 basis points in 2012, also cut its lombard rate to 4.75 percent, the deposit rate to 1.75 percent and the rediscount rate to 3.50 percent.
The size of the cut was unexpected as last month only two members of the bank's 10-member policy-making council had voted for a 50 basis point cut in rates. In February the central bank cut rates by 25 basis points and did not signal any future moves.
In the fourth quarter of last year, Poland's Gross Domestic Product rose by 0.2 percent from the third quarter for annual growth of 1.1 percent, down from 1.8 percent. In 2012 economic growth was estimated to have declined to 2.0 percent from 4.3 percent in 2011.
Poland's inflation rate fell to 1.7 percent in January from December's 2.4 percent, in the lower range of the bank's target of 2.5 percent, plus/minus one percentage point.