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Poland cuts interest rates to record low

Poland's central bank has reduced interest rates to a record low in an attempt to ease the cost of borrowing after a slowdown in both inflation and economic growth.

The bank cut the key rate of interest by 0.25 per cent to three per cent and it appears more could be on the way in the future, as the bank's governor Marek Belka refused to rule out further cuts.

"I think that we are still leaning towards an easing stance," Mr Belka said at a news conference.

Poland has joined Hungary and Australia in lowering rates to a record-low as the debt crisis on the country's border curbs growth and consumer prices. Poland is currently battling against the steepest slowdown in more than ten years.

The central bank is also wary of last week's rate cut by the European Central Bank and said it expects growth rates to remain low and that there is a large risk that inflation could remain markedly below its 2.5 per cent target.

By Tony Aynsley