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UPDATE 2-Hawkish Polish c.banker edges towards Nov rate cut vote

Monday, 8 Oct 2012 | 6:16 AM ET

* Glapinski softens position, paving way for possible Nov cut

* Rate cuts should be done in stages, he says * Dovish colleague Chojna-Duch calls for "radical" cut

(Adds comments from c.banker Chojna-Duch, details)

WARSAW, Oct 8 (Reuters) - Polish central banker Adam Glapinski said he might vote for an interest rate cut in November, signalling a policy shift that could clear the way for the bank to lower borrowing costs next month.

Poland kept rates unchanged last week, surprising analysts who had expected a cut and prompting concerns the bank may have left it too late to counter a sharp economic slowdown in central Europe's largest economy.

Glapinski's comments pointed to a change in thinking from one of the most vocal opponents of cuts on the bank's 10-strong Monetary Policy Council (MPC), who two weeks ago said there was no reason to start a monetary easing cycle.

He said he could back a cut in November if the new central bank projection due next month shows a major economic slowdown in 2013 and no risks that inflation would not ease to the bank's 2.5 percent target.

"It is not that I'm strictly against a rate cut in November," Glapinski told state news agency PAP in an interview released on Monday. "But if I don't see this, I will not change my stance."

The central bank said last week that it would cut rates under the same two conditions.

Despite the slowdown in the economy, inflation has been running stubbornly above the central bank's target for most of the past five years.

Polish growth has been hit by the growth slump in the euro zone, its main trade partner, and a government deficit-reduction drive.

Market watchers widely expect Poland to start an easing cycle rather than cutting rates in a one-off move, and Glapinski echoed such expectations.

"Only a cut totalling 75 basis points will be noticeable," he said.

Fellow policymaker Elzbieta Chojna-Duch, one of the strongest proponents of cuts, said on Monday rates should be cut by 100 basis points by the end of next year to help the economy.

She added that economic growth may ease to around 1.5 percent year-on-year in the fourth quarter, from 2.4 percent in the second quarter.

"It (the key interest rate) should be lowered radically, because it (the cut) is slightly late, and afterwards there should be a regular adjustment cycle," Chojna-Duch told broadcaster TVN CNBC.

Poland's main rate stands now at 4.75 percent after a batch of hikes delivered in the first half of 2011 and a surprise hike in May.

Poland's forward rate agreements price in 100 basis points of cuts over the next 9 months.

(Reporting by Dagmara Leszkowicz and Marcin Goettig; Editing by John Stonestreet)

((marcin.goettig@thomsonreuters.com)(+48226539720)(Reuters

Messaging: marcin.goettig.reuters.com@thomsonreuters.net))

Keywords: POLAND RATES/