* C.bank should adopt wait-and-see approach after January
* May cut further if projection points to deeper slowdown
* Market prices in further cuts totaling 125 basis points
By Pawel Sobczak
WARSAW, Dec 10 (Reuters) - Poland’s central bank should not take a breather in further monetary policy easing and another interest rate cut as soon as next month is “rather certain,” a central banker said.
Adam Glapinski, seen as the bank’s most hawkish policymaker, also told reporters he would opt for a pause after a possible cut at the start of 2013.
“I am for not breaking the cycle in December. I think the next, January cut is rather certain,” Glapinski said. “Another potential cut, in February, will probably be discussed much longer and much more broadly.”
The policymaker’s remarks echo the view of the central bank governor, who pointed to a further easing in January at a news conference following Wednesday’s decision to cut borrowing costs by another 25 basis points.
Glapinski said he does not rule out further cuts if an inflation projection published at the start of March shows a deeper slowdown or even a recession.
Poland is the only European Union country to avoid a recession since the post-Lehman crisis but falling demand for the country’s goods in the eurozone - the country’s main trade partner - has led to a sharp economic slowdown.
In a response to the economic slump, Poland’s Monetary Policy Council has already cut borrowing costs by a total of 50 basis points since November, bringing the key rate to 4.25 percent, the lowest level since May 2011.
Poland’s 12x15 forward rate agreements price in further interest rates cuts totalling 125 basis points over the next twelve months. (Writing by Dagmara Leszkowicz; editing by Todd Eastham)