Traders Challenge Belka to Cut Polish Rates as Deflation Weighs
- Forward-rate agreements show Poland to lower benchmark in 2016
- Slowdown and external price shocks may spur cut, analysts say
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Polish central bank Governor Marek Belka will go back on his pledge to keep interest rates on hold before his term ends in mid-2016, according to derivatives traders.
Forward-rate agreements, which are used to speculate on borrowing costs, are showing scope for more than a quarter-point reduction in interest rates over the next nine months. That’s the biggest bet on monetary easing since March, when Poland’s central bank last reduced its key rate to a record 1.5 percent and Belka said he’s done with cuts.