Polish Yields Hit Low as Central Bankers See Cuts; Zloty Gains

Polish 10-year bond yields dropped for a fourth day to a record low after two policy makers signaled the central bank will cut rates next month and before a report expected to show inflation is slowing.

The yield on notes due on October 2023 fell eight basis points to 3.87 percent as of 5:19 p.m. in Warsaw, having declined eight basis points last week. The zloty advanced 0.3 percent to 4.1082 against the euro.

The central bank cut borrowing costs for a second time in as many months last week, reducing the main interest rates by a total of 50 basis points to 4.25 percent. Poland remains in monetary easing mode, policy maker Elzbieta Chojna-Duch said on TVN CNBC today. A rate cut in January is almost certain, fellow central banker Adam Glapinski told PAP newswire today. A report due on Dec. 13 will show the inflation rate dropped to 2.9 percent in November, a two-month low, according to a median estimate in a Bloomberg survey of 31 economists.

“Morning comments from Chojna-Duch and Glapinski confirm prospects for an interest-rate cut in January,” Aleksandra Bluj, a fixed-income analyst at Bank Pekao SA (PEO) in Warsaw, said in an e-mailed report. “While the expectations are strong, the yields may decline further.”

To contact the reporter on this story: Piotr Skolimowski in Warsaw at pskolimowski@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.