Polish central bank leaves rates unchanged, as expected

WARSAW: Poland's central bank decided to keep its key interest rate on hold at 0.1% on Wednesday, acting in line with analysts' expectations as speculation of a further cut in borrowing costs fades.

While financial markets have been pricing in some chance of a rate cut in the coming months, recent statements from central bankers and data showing the economy's resilience to the COVID-19 pandemic have led most economists to conclude that stable rates are the most likely scenario until the end of 2022.

All 18 analysts polled by Reuters expected rates to remain on hold on Wednesday.

"The decision to keep interest rates unchanged is not surprising," said Mateusz Sutowicz, a financial market analyst at Bank Millennium.

"According to recent comments from the governor of the National Bank of Poland, the March meeting, during which we will learn about the assumptions of the latest macroeconomic projection, may prove decisive for the outlook for interest rates."

Poland's benchmark interest rate has been at a record low of 0.1% since rate-setters slashed the cost of borrowing three times by a cumulative 140 basis points during the first wave of the economically damaging COVID-19 pandemic in the spring of 2020.