Quotes from Societe Generale:
- The Polish Monetary Policy Council has cut the key interest rate 50bp to 1.50%, outmatching the market consensus and our forecast of a 25bp cut. The decision also puts the deposit rate at 0.50% and the lombard rate at 2.50%, both a record low.
- We see this move as a one-off adjustment driven by deeper deflation in Q1, relatively high real rates and the ECB's QE. Also, the CPI and GDP projections in the Inflation Report supported rate cuts in March.
- We are convinced that the MPC will now remain in "wait-and-see" mode at least until Q4 this year.
