“A new cut of 25 basis points seems likely right now,” an ING analysis said Friday, adding that the central bank’s latest report suggest an attitude of compensation for an extremely difficult economic environment where mother banks are cutting their branches off from funding.
ING believes further cuts, below 5%, are highly unlikely, but not excluded.
Experts from UK bank Barclays expect the central bank to reduce the key rate as well, for the final time in this adjustment cycle.
That opinion is shared Raiffeisen analysts as well, provided that external markets do not show significant deterioration.
An estimation by financial-banking analyst association AAFBR earlier this week also pointed to a monetary policy rate of 5% at the end of this year.
The central bank Thursday cut its key monetary policy rate by 25 basis points for the fourth consecutive time to a record low of 5.25% a year, amid a falling inflation and subdued domestic demand.
The rate cut was in line with analyst expectations as it follows several months of reduced inflation, with the annual rate at 2.6% in February, the lowest in over two decades.
The central bank targets an annual inflation of 3% at the end of 2012, plus/minus one percentage point around the band. The bank recently revised down its year-end forecast to 3% from 3.5%, saying it expects a favorable base effect and lower volatile prices.