By Karolina Slowikowska
WARSAW, Feb 6 (Reuters) - Poland cut interest rates by 25 basis points for the fourth month running on Wednesday, but analysts said the move was too little and too late to have a substantial impact on the sharply slowing economy.
With Wednesday's decision, which was in line with analysts' expectations, the central bank's Monetary Policy Council (MPC) brought the benchmark rate down to 3.75 percent, the lowest level since March 2011.
'The cuts came too late,' said Piotr Bujak, chief economist at Nordea Bank Polska.
'If they acted faster, the slowdown could have been shallower ... The Council should be forward-looking, and instead it is chasing reality,' he said.
The zloty currency gained slightly immediately after the decision.
In the neighbouring Czech Republic, whose economy is stuck in the longest downturn for 15 years, the central bank left interest rates unchanged.
Czech rates are already near zero, so there is little scope for more cutting. 'Nothing more was expected,' Michal Brozka, chief analyst with Raiffeisenbank in Prague, said of the rate decision.
Policy-makers say their focus will now shift to weakening the crown currency. Investors were waiting for a central bank news conference at 13:30 GMT for hints on if and when the intervention will happen.
BEHIND THE CURVE?
In Poland, Prime Minister Donald Tusk had joined economists in urging bolder rate cuts to help the spluttering economy, until last year one of the most resilient and fastest-growing in the European Union.
The bank though has stuck to a cautious stance. The monetary policy council has suggested that if rates were cut too far, that could revive inflation and destabilise the zloty.
Markets are looking to a Polish central bank news conference at 15:00 GMT for indications about whether the MPC will cut rates further, or will call a pause in the easing cycle.
But data suggests that even if they cut again, it will have only limited impact on the real economy. Some economists say there is a real risk of stagnation or even contraction early this year, though they expect an improvement in the second half.
Lower rates should in theory stimulate borrowing and spending, but in Poland that is diluted by cautious banks and the fact many consumers have debts denominated in foreign currency, so are unaffected by Polish rate decisions.
The cuts to date have helped lower the WIBOR rate, used as benchmark for bank loans, but borrowing is still more expensive than in most European countries.
Preliminary data indicates that private consumption may have contracted in the fourth quarter of last year, the first time that has happened since the fall of Communism in 1989.
In 2012 as a whole, consumer credit fell by 6.9 billion zlotys ($2.24 billion) to 132.1 billion. That is troubling for policy-makers because the last time Poland had a slowdown, in 2009, consumption stayed strong and was a vital factor in reviving the economy.
Poland has been the only country in the European Union to avoid recession since the eruption of the global crisis in 2008, but the persistent financial troubles of the euro zone, its main trading partner, are finally taking their toll.
Data showed the economy, the largest in central Europe, slowing to 2.0 percent in 2012. That was the weakest in three years and less than half the 2011 growth rate of 4.3 percent. ($1 = 3.0854 Polish zlotys)
(Additional reporting by Jana Mlochova in Prague; Writing by Christian Lowe) Keywords: CENTRALEUROPE RATES/
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