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Poland cuts interest rates to help slowing economy

Source : AP
Last Updated: Wed, Dec 05, 2012 14:00 hrs

The National Bank of Poland has cut its key interest rate a quarter of a percentage point to 4.25 percent to support the slowing economy.

Wednesday's cut is the second in a month. In early November, the central bank lowered the reference rate also by a quarter point, to 4.5 percent, in its first cut in three years.

The cuts aim to boost domestic demand and were made despite inflation hovering around 4 percent, above the bank's target of 2.5 percent. Lower interest rates tend to support inflation as well as economic activity.

The economy grew by 4.3 percent last year but is forecast to slow to just above 2 percent this year. In the third quarter, it grew only 1.4 percent.

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