Glapiński about inflation, economy and ecological inventions of the EU. “Cash will always work”
At the July meeting, the Monetary Policy Council, contrary to the expectations of the vast majority of economists, reduced interest rates by 25 PB. In addition to economic issues, NBP president Adam Glapiński sharply commented on the EU climate policy. “For such atmospheric luxuries, you can afford some level of development when people have metal needs met” – he noted.
Under the decision of the Monetary Policy Council published on July 2, 2025, the interest rates of the National Bank of Poland will be as follows:
- reference rate 5.00% on an annual scale;
- Lombard rate of 5.50% on an annual basis;
- deposit rate 4.50% on an annual basis;
- Redskonta rate of bills of exchange 5.05% on an annual basis;
- Discount rate of bills of exchange 5.10% on an annual basis.
– Although most economists bet on leaving their feet at an unchanged level, market valuations, however, are inclined to their reduction by 25 PB. – So before the announcement of the Council's decision, PKO BP economists wrote. As it turned out, the cut occurred, despite the fact that the consensus of analysts' forecasts clearly indicated that this would not happen. 3 out of 29 economists surveyed put on a reduction.
At the previous meeting of the MPC, a decision was made to maintain interest rates at unchanged levels. In May, however, the council decided on a strong, 50-point reduction after a 17-month break in reducing credit costs.
President Glapiński explains the decision on an unexpected foot reduction
At the July meeting, the Monetary Policy Council, contrary to the expectations of the vast majority of economists, reduced interest rates by 25 PB.
Under the decision of the Monetary Policy Council published on July 2, 2025, the interest rates of the National Bank of Poland will be as follows:
- reference rate 5.00% on an annual scale;
- Lombard rate of 5.50% on an annual basis;
- deposit rate 4.50% on an annual basis;
- Redskonta rate of bills of exchange 5.05% on an annual basis;
- Discount rate of bills of exchange 5.10% on an annual basis.
– Although most economists bet on leaving their feet at an unchanged level, market valuations, however, are inclined to their reduction by 25 PB. – So before the announcement of the Council's decision, PKO BP economists wrote. As it turned out, the cut occurred, despite the fact that the consensus of analysts' forecasts clearly indicated that this would not happen. 3 out of 29 economists surveyed put on a reduction.
At the previous meeting of the MPC, a decision was made to maintain interest rates at unchanged levels. In May, however, the council decided on a strong, 50-point reduction after a 17-month break in reducing credit costs.
https://www.youtube.com/watch?v=re4vyhntdk4
– Inflation decreasing from quarter to quarter is that the NBP policy was appropriate. The decrease in inflation means that the monetary policy prevented the consolidation and spilling of inflation – at the beginning of the conference, the NBP president Adam Glapiński told the conference.
“Inflation decreases from quarter to quarter. According to the projection, from July, inflation will be in accordance with the level of inflationary target of the NBP. Again, we managed to push her to the level we had a year ago. In addition, the wage dynamics in the enterprise sector slowed down again and further forecasts indicate further inhibition of wage dynamics. In view of the above, after a long decision, the Council decided that it was necessary to carefully adapt interest rates to decreasing inflation ” – noted Glapiński.
The projection shows that in the medium period, inflation will be in line with the NBP inflation goal of 2.5% with the permissible deviation by one percentage point – the NBP president noted.
President Glapiński also expressed concern on the persistent and very high fiscal deficit.
The fiscal policy is very loose. According to the EC forecasts, the deficit will be 6.4% and will be one of the highest in Europe. The EC's forecast assumes that also next year the fiscal deficit will remain very high and we will not be dealing with fiscal closerness. Everything indicates that in 2026 public debt will exceed 60% of GDP for the first time in history. The rapid growth of debt is worried because it is a threat to macroeconomic stability, including inflation – pointed out the president of the Central Bank.
Glapiński: Projection is our Bible
Unemployment is extremely low. At the same time, employment in the enterprise sector has been decreasing for several months. In May, the salary dynamics slowed down to 8.4% and is no longer double -digit after clearly acceleration in April. It is expected to slow down the dynamics of salary growth – pointed out Adam Glapiński.
Further council decisions will depend on the influx of information. This is not the beginning of the cycle of interest rate reductions – we do not announce anything like that. We do not have a fixed interest rate path. Our commitment is to bring inflation to the goal – emphasized President Glapiński.
– We did not give any premises that the feet would not be changed in July. We reacted to new data. Here, the substantive situation was rather obvious – This is how the president of the NBP commented on the discrepancy of the July decision with the expected most analysts.
Glapiński criticizes the EU climate policy
– Now there is a cycle that these feet decrease and will probably decrease. If there is no leap of inflation, the helmsman of the Polish monetary policy said. – ETS2 and the European Union climate policy may be such a factor. It may conquer inflation with 2 percentage points in Poland. The EU somehow will not stop this policy and these ideas for Poland are particularly painful – added the head of the NBP.
“For such atmospheric luxuries, you can afford some level of development when people have the basic needs met” – he emphasized.
Gold is strong, it is an independent currency, independently shaping its course. From the beginning of my term, the zloty strengthened by 3% to the euro and 7% against the dollar. Gold is our bumper. We react with it, not a change in unemployment.
We are a large and strong economy, rapidly developing. We can afford our own currency. Our currency is very strong by itself – noted the president of the NBP
Glapiński: Cash will always work
We need to maintain the use of material money in circulation. Cash defense is particularly important. Part of the money must be in cash, both for public security reasons and personal reasons – emphasized Glapiński.
“Cash will always work,” he added.
“Gold reserves give us a powerful security load. Everyone sees that we are a 100% solvent country in every situation. Other banks that can afford it also have huge gold resources. We moved to this level 20%, typical of developed countries “ – said the president of the NBP.
Cutting in July and what next?
If there are such trends [spadająca inflacja – red.]of course, we can continue to reduce interest rates. We only avoid such situations so as not to lower your feet so that they need to be raised later. I suspect that if there were a decision -making meeting in August, maybe there would be no reduction. If there are favorable circumstances, then there are no contraindications to the next reduction – Glapiński answered the questions of the Bloomberg agency regarding further MPP movements.
“We are open to continue to lower your feet. If the inflation goes down to 2.5% and we predict that in the following quarters you will not deviate from this level too much, then we will go down very low with your feet” – he added.
We adapt the feet to inflation. If inflation is permanent in order, then the foot will be as low as possible then. The feet may be low if the inflation is also low, in turn, the President of the NBP answered the questions of the Reuters agency.
