Poland’s Monetary Policy Council (RPP) has cut the National Bank of Poland’s benchmark interest rate by 25 basis points to 4.00 percent.

The RPP's decision was expected by many economists, since inflation and economic activity in recent months have declined. Industrial and construction output have remained weak over recent months and the annual growth of retail sales has continued to run slightly above zero. The RPP also points out that in the recent months, household and corporate lending growth have continued to weaken.

The decrease in the interest rates should support and stimulate economic activity, and eliminate the risk of inflation falling below the target.

In an official statement the RPP did not rule out the possibility of further reductions in interest rates if the incoming data confirm a lasting economic slowdown.

MM