The Polish central bank lowered its main interest rate by 75 basis points on Wednesday to 6.00%, sending the Zloty plummeting against the Euro.

A small majority of analysts surveyed by Reuters had predicted just a 25-basis point rate cut.

The Zloty fell 1.5% to its weakest level since May, and banking stocks declined more than 5%.

According to the National Bank of Poland (NBP), the rate cut decision was made as it forecasts inflation will return to target more quickly than originally expected.

"In the Council's assessment, recently incoming data point to a weaker demand pressure than previously expected, which will contribute to a faster return of inflation to the NBP inflation target," the bank said in a statement.

The central bank added that the adjustment to interest rates would be "conducive to meeting the NBP inflation target in the medium term."

Governor of the central bank, Adam Glapinski, had previously indicated that there would be a rate cut in September if inflation had declined to single digits, Reuters news agency reports.

Yet, although inflation did fall in August, it remained marginally short of this target, at 10.1%, as per a flash estimate.

"We have already said that it is too early for a rate cut, and certainly such an aggressive rate cut, when the prospects (of a slowdown) in inflation are still distant," according to the director of the economic analysis department of Santander Bank Polska, Piotr Bielski.

"I think that the market will be pricing in the risk of inflation becoming entrenched, and in general, this will make it difficult for inflation to return to the target."

Whereas JP Morgan analysts said, it's appropriate for central banks to remain cautious, considering the ongoing inflation uncertainty in this cycle in Poland and around the world.

"If cutting rates at this point was debatable, cutting in size is even more so," they said in a note.