Poland Interest Rate

The National Bank of Poland (NBP) cut its benchmark rate by 25 bps to 5.00% at its July 1–2 meeting, defying expectations for a hold. The Lombard and deposit rates were also lowered to 5.50% and 4.50%, respectively. The decision was based on revised inflation and GDP forecasts, with the CPI path adjusted downward. June inflation rose slightly to 4.1% from 4.0% in May, still above the 3.5% upper target. However, projections point to slower inflation ahead. Easing tensions in the Middle East helped lower oil prices, supporting the zloty against the euro and dollar. Further cuts may be considered in September or later in the year.