WARSAW: Uncertainty over the COVID-19 pandemic raises a slight risk of further rates cuts in Poland and they are more likely to stay stable as the economy recovers, central banker Cezary Kochalski said.

His comments in an email to Reuters reinforce statements from the central bank governor Adam Glapinski on Friday that interest rates could drop below zero, but only if the pandemic causes further significant economic damage.

Poland's central bank cut borrowing costs three times in the first wave of the pandemic by a cumulative 140 basis points, reducing its main interest rate to a record low of 0.1%.

"Taking into account the current data and information on the economic situation, it is appropriate to stabilise interest rates at the current level until the economy enters the path of sustainable development," Kochalski said by email in response to questions from Reuters.

The Monetary Policy Council (MPC) member said cutting interest rates to zero would be justified in the event of a significant worsening of the financial situation of indebted households and companies, which would have an impact on consumption, business continuity and investment.

"I treat the question of whether I allow for the possibility of negative interest rates as hypothetical, based rather on low probability from the point of view of the current and forecast condition and results of the Polish economy," Kochalski said.

"The reference rate is currently 0.1%. The space for its reduction, so that is not a negative... is small, but it exists," he said.