Polish bond yields declined after policy maker Andrzej Kazmierczak said the central bank might cut rates further and before a report tomorrow that may show industrial output fell the most since 2009.
The yield on notes maturing October 2023 fell five basis points, or 0.05 percentage point, to 3.98 percent at 5:09 p.m. in Warsaw. The zloty was little changed at 4.1200 per euro.
While the central bank might cut interest rate because of a “significant” decline in inflation, it should be mindful of the zloty exchange rate, Kazmierczak told TV Trwam late yesterday. A report tomorrow will probably show industrial production contracted 6.5 percent from a year earlier in December, the steepest decline since April 2009, according to a median estimate in a Bloomberg survey of 28 economists.
“Kazmierczak’s comments are helping push the yields lower,” Bank Millennium SA economists led by Grzegorz Maliszewski in Warsaw, wrote in an e-mailed report today. “He is perceived as a policy maker who has been in favor of more limited monetary easing than the market expects.”
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