For the fourth month running, the National Bank of Poland's rate-setting committee, the Monetary Policy Council (RPP), cut its reference interest rate by 25 basis points, to 3.75 percent. The last time the main rate was this low was back in March 2011, after which the council raised rates by 25 bp three months in a row.

Source: National Bank of Poland

Recent macroeconomic data releases have shown a marked slowdown in inflation to below the NBP's target of 2.5 percent as well as in consumption and economic growth in general. Last month, the country's statistics office GUS announced that in 2012 Poland's economy grew by just 2 percent, its weakest rise since 2009. Private consumption, whose strong performance during 2009-2010 was credited for Poland's ability to escape the global economic crisis without going into recession, has now dipped into negative territory.

Several government officials, including Finance Minister Jacek Rostowski, had called on the council to continue cutting rates. While a cut had been widely favored by economists, there was some doubt as to whether the council would come through after NBP president and head of the RPP, Marek Belka, said in January that the council's easing cycle was "nearing an end."

However, in the communique released after the meeting the RPP retained a dovish tone. NBP president Marek Belka emphasized that there was no reason to believe that the council wouldn't cut in March, but rather that "all options are possible."

Andrew Kureth