NBP's 75bp Rate Cut Today Was Its First Such Move Since 2008

Following the larger-than-expected rate cut from the NBP, ING write that "the scale of the cut is not consistent with the current conditions. Theoretically, Poland joins the group of emerging economies which are starting monetary easing, but it differs from them significantly: core inflation is declining slower than elsewhere in the region, LATAM countries had positive real interest rates. Prior to the decision, financial markets were pricing 300bp worth of cuts in this cycle, but not at this pace."

• Pekao note that "we will only learn whether this was a clue for the remainder of the cycle during tomorrow's press conference with NBP Governor". They add that we are leaving behind the longest period of NBP rates being stable at their peak level in this century. They also say that a 75bp cut is not typical for the NBP and the last time the central bank lowered interest rates by so much was in 2008.