Surprise Interest Rate Cut Announcement from the Polish Central Bank

Unexpected Interest Rate Cut by the Polish Central Bank

The Polish Central Bank unexpectedly cut interest rates for the fourth time in 2023. Despite the country's expansionary budget policies, monetary policy officials expect inflationary pressures to remain limited.

How Much Did the Interest Rate Decrease?

The bank announced that it reduced its policy interest rate by 25 basis points to 4.50 percent. In Bloomberg surveys, economists had expected the interest rate to remain at 4.75 percent. With this cut, it has been noted that the bank has lowered interest rates by a total of 125 basis points since May.

Decline in Inflation and Government Measures

This decision came after inflation fell below 3 percent in the last two months and the government extended its decision to freeze household electricity prices.