Poland’s central bank kept borrowing costs unchanged for a fourth month at the highest level since 2009 even after the economy expanded at the weakest pace in almost three years.

The Narodowy Bank Polski left the benchmark seven-day interest rate at 4.75 percent, the highest since January 2009, in line with the expectations of 27 of 28 economists surveyed by Bloomberg News. One economist predicted a rate cut to 4.5 percent. The bank will comment on the decision at a news conference at 4 p.m. in Warsaw. The zloty pared its decline against the euro after the announcement while bonds were steady.

The central bank, the only one in the European Union to raise borrowing costs this year, increased the benchmark in May after keeping it unchanged for almost a year. While policy makers said Poland’s expansion in the face of Europe’s debt crisis allowed them to focus on inflation, growth slowed more than economists forecast in the second quarter, bolstering the case for monetary easing.

“The recent data should be sufficient to lead to a gradual softening of the MPC’s tone,” Piotr Kalisz, chief economist at the Polish unit of Citigroup Inc., said before the decision. “The economic-growth slowdown increases the chance of a rate cut in November, and in the next 12 months rates will fall by around 1 percentage point.”

Slowing Growth

The zloty traded 0.3 percent weaker on the day to 4.2057 per euro at 1:44 p.m. in Warsaw, after touching a six-week low of 4.2176 earlier in the day. Two-year government bond yields increased one basis point, or 0.01 percentage point, to 4.01 percent, according to generic data compiled by Bloomberg.

Gross domestic product rose 2.4 percent in the second quarter from a year earlier, the slowest pace since the third quarter of 2009 and down from 3.5 percent in the January-March period as companies and consumers scaled back spending amid the debt crisis. Poland sells more than half its exports to the 17- nation euro region, where the debt crisis is crimping demand.

The government, which has kept its target for 2.5 percent growth this year, yesterday lowered its prediction for 2013. GDP will rise 2.2 percent instead of a previously estimated 2.9 percent, according to a new 2013 draft budget.

While central banks across the world are undertaking the broadest cut in borrowing costs since 2009 to avert a global slump, the Narodowy Bank Polski has kept rates at their highest since 2009 for a second year. Still, the bank has now changed its “policy bias” and prospects for cutting rates have increased, Governor Marek Belka told Radio PiN in an interview on Aug. 28.

Reduction Room

“There is a room to reduce which, if necessary, I’m sure we’ll utilize,” Belka told Bloomberg Television in an Aug. 31 interview in Wyoming.

Forward-rate agreements are trading 47 basis points below the Warsaw interbank offered rate, signaling bets for almost two quarter-point rate reductions over three months, according to data compiled by Bloomberg. The yield on five-year government bonds in zloty was at 4.24 percent today, near yesterday’s record low of 4.22 percent.

The zloty has weakened 2.5 percent to the euro, the most among 25 emerging currencies chased by Bloomberg, since Aug. 28, when Belka announced the change in policy bias and Hungary unexpectedly lowered rates by a quarter-point.

Bloomberg