Polish easing cycle at an end, policy to stay extremely loose

The Polish MPC was uncharacteristically forthright in its statement that today’s 50bp cut in the policyinterest rate, to 1.5%, marked the end of the easing cycle. But it’s clear that weak price pressures willremain a concern for some time to come. As a result, we expect the policy rate to stay at its currenthistoric low over the next couple of years. Moreover, in so far as there is a movement in interest ratesover that period, we think it’s more likely to be down than up.