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Conference following the March meeting of the Monetary Policy Council

Date: 04-03-2015

At the March meeting, the Monetary Policy Council decided to decrease the interest rates by 0.50 percentage points. This decision marks the end of the monetary easing cycle.

At the meeting held on 3 and 4 March, the Monetary Policy Council decided to decrease the NBP interest rates by 0.50 percentage points. From 5 March, the reference rate will amount to 1.50%, the lombard rate to 2.50%, the deposit rate to 0.50% and the rediscount rate to 1.74%.

"Taking into account the prolonged deflation and a significant increase in the risk of inflation remaining below the target in the medium term, as indicated by the March projection, the Council decided to decrease NBP interest rates", the MPC explained the decision in the press release following the meeting.

An equally relevant argument in favour of a monetary policy easing was that despite the persistent deflation, the zloty might appreciate excessively due to the launch of the ECB's quantitative easing programme. Also, the disparity between the NBP interest rates and the interest rates of other central banks has narrowed. "We are in line with the policies of other central banks operating outside the euro area", explained NBP President, Professor Marek Belka.

The Council emphasised that the monetary easing cycle has come to an end. Asked whether there was still room for further interest rate cuts, NBP President answered: "In my opinion, this room has been used up", adding: "I see no more space for cuts or expectations of those. "

During the March meeting, the Council acquainted itself with the latest projection of inflation and GDP. According to the projection, assuming unchanged interest rates and considering data available until 17 February – there is a 50-per cent probability of inflation running in the range of -1.0-0.0% in 2015 (as compared to 0.4-1.7% in the November 2014 projection), -0.1-1.8% in 2016 (as against 0.6-2.3%) and 0.1-2.2% in 2017. At the same time, the annual GDP growth will be, with a 50-per cent probability, 2.7-4.2% in 2015 (as compared to 2.0-3.7% in the November 2014 projection), 2.2-4.4% in 2016 (as against 1.9-4.2%) and 2.4-4.6% in 2017. The Council approved Inflation Report – March 2015.

Besides the Chairman, the conference was attended by Professors Elżbieta Chojna-Duch and Andrzej Kaźmierczak. The next MPC meeting is scheduled for 14-15 April 2015.

NBP interest rates

Reference rate 6.75
Lombard rate 7.25
Deposit rate 6.25
Rediscount rate 6.80
Discount rate 6.85

Exchange rates

Table of 2023-02-01
1 EUR4.7080
1 USD4.3254
1 CHF4.7222
1 GBP5.3279
100 JPY3.3307

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