(Reuters) - Poland is likely to cut interest rates by 25 basis points next week to a new all-time low and reduce them by a further 50 points by the end of the first quarter of 2015, according to a Reuters poll.
Twenty of 24 economists polled on Oct. 1-3 expect the central bank's Monetary Policy Council (MPC) to cut the benchmark rate to a record low of 2.25 percent when it meets on Tuesday-Wednesday.
The remaining four economists expect a 50 basis point cut. "The September statement was surprisingly bold and made it clear that there is going to be a rate cut now," said Grzegorz Ogonek, an economist at ING Bank Slaski.
The central bank said after its policy meeting last month that it would start cutting rates if new data confirmed the economy - eastern Europe's largest - was weakening and inflation continued to fall far short of the bank's 2.5 percent target.
Since then, data has shown industrial output fell in August at the fastest pace since March 2013 while deflation accelerated.
Consumer prices had fallen in July for the first time in three decades, partly because of an embargo on Polish food imports imposed by Russia.
The poll forecast the benchmark rate would fall a further 25 basis points to 2.0 percent by the end of 2014 and another 25 by end-March 2015 to reach 1.75 percent, where it would stay until a hike in the fourth quarter of 2015.
The scale of easing expected by analysts is slightly smaller than that priced in by financial markets, which see a total 75-100 basis points in monetary easing over the next six months.
The central bank has kept its benchmark interest rate at 2.50 percent since July 2013, after cutting it by 225 basis points since late 2012 to spur the economy.
Two rate setters, Elzbieta Chojna-Duch and Jerzy Osiatynski, said they would support a cut larger than 25 basis points in October.
However, Anna Zielinska-Glebocka, whose opinion is likely to be more representative of the majority on the bank's 10-member Monetary Policy Council, said she may opt for a 25-basis-point move in October and another in November.
reuters.com
Twenty of 24 economists polled on Oct. 1-3 expect the central bank's Monetary Policy Council (MPC) to cut the benchmark rate to a record low of 2.25 percent when it meets on Tuesday-Wednesday.
The remaining four economists expect a 50 basis point cut. "The September statement was surprisingly bold and made it clear that there is going to be a rate cut now," said Grzegorz Ogonek, an economist at ING Bank Slaski.
The central bank said after its policy meeting last month that it would start cutting rates if new data confirmed the economy - eastern Europe's largest - was weakening and inflation continued to fall far short of the bank's 2.5 percent target.
Since then, data has shown industrial output fell in August at the fastest pace since March 2013 while deflation accelerated.
Consumer prices had fallen in July for the first time in three decades, partly because of an embargo on Polish food imports imposed by Russia.
The poll forecast the benchmark rate would fall a further 25 basis points to 2.0 percent by the end of 2014 and another 25 by end-March 2015 to reach 1.75 percent, where it would stay until a hike in the fourth quarter of 2015.
The scale of easing expected by analysts is slightly smaller than that priced in by financial markets, which see a total 75-100 basis points in monetary easing over the next six months.
The central bank has kept its benchmark interest rate at 2.50 percent since July 2013, after cutting it by 225 basis points since late 2012 to spur the economy.
Two rate setters, Elzbieta Chojna-Duch and Jerzy Osiatynski, said they would support a cut larger than 25 basis points in October.
However, Anna Zielinska-Glebocka, whose opinion is likely to be more representative of the majority on the bank's 10-member Monetary Policy Council, said she may opt for a 25-basis-point move in October and another in November.
reuters.com
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