A two-day meeting of the Monetary Policy Council (MPC) began on Tuesday, culminating in Wednesday's decision on interest rates in Poland. You can expect it between 14 and 16. At least that's been the case in recent months.
The key question is: is now the right time for another interest rate cut? Due to this turn of events Mainly borrowers would be happybecause it would mean lower costs of borrowing money. On the other hand, they are savers who benefit less from interest due to falling bank interest rates.
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The Chairman of the Monetary Policy Council and the President of the National Bank of Poland, Adam Glapiński, has so far avoided announcing specific decisions in advance. He also emphasized that the previous reductions were of an adaptive nature and were not part of a cycle. There were three such cuts this year:
- by 0.5 percentage point up to 5.25 percent — May 8
- by 0.25 percentage points up to 5 percent — July 3
- by 0.25 percent up to 4.75 percent — September 4
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Maciej Rudke / Central Statistical Office, NBP, own study
See also: There is a September decision of the Monetary Policy Council on interest rates. What do borrowers say about this?
Following this logic (reductions every two months), we can expect a pause at the October meeting and a cut only at the beginning of November.
What do economists say? Almost everyone agrees that the reduction will take place this year, probably in October or November, but no one knows which date the Monetary Policy Council will choose. The market consensus is exceptionally ambiguous this time. Exactly half of the analytical teams surveyed by “Parkiet” (9 out of 18) expect a rate cut already in October. The second half assumes that the MPC will hold off for a while.
The interest rate cut in October is real
“The discount in October is real” – admits Agata Filipowicz-Rybicka, chief economist at Alior Bank. She points out that there is no shortage of arguments for the cut and lists: prolonged freezing of energy prices, lower than expected inflation and wages in recent readings.
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He notices though signals coming from the Monetary Policy Council that after the previous cuts, we may enter a phase of greater caution and fewer decisions. In particular, the MPC emphasizes the risks associated with loose fiscal policy.
“Even if a decision is made to reduce it, it will probably be the last such move this year. The Monetary Policy Council will probably emphasize the limited potential for further cuts, which should calm the currency market and limit the pressure on the zloty,” comments Agata Filipowicz-Rybicka. She forecasts that next year interest rates will be heading towards 3.5%. This is quite a common opinion.
The group of economists betting on cuts includes representatives of Bank Gospodarstwa Krajowego (BGK). “We believe that, among other things, wage growth and the economic climate were slightly below the council's expectations in September. At the same time, price pressure for households remains subdued. In addition, the freezing of electricity prices for consumers was extended, which was often raised as an element of uncertainty by members of the body. The above factors should encourage the Monetary Policy Council to reduce interest rates again, even assuming hawkish arguments related to lenient fiscal policy and increased dynamics of service prices,” we read in the BGK analysis.
Economists also expect interest rates to be reduced in October Citi Handlowy and Bank Millenniumwho indicate that financial markets are also counting on this.
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Interest rate cut in October contrary to declarations regarding the cycle
What do the economists of the largest Polish bank think about this? “We assume that the Monetary Policy Council will leave interest rates unchanged at 4.75 percent, although the probability of a reduction by 0.25 percentage points is, in our opinion, very large” – we read in the analysis of PKO BP analysts.
Forecasts for the main interest rate at the National Bank of Poland
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PKO BP
They remind us that before the announcement of the MPC reduction cycle, a number of risk factors for price stability held back, such as the government's loose fiscal policy, high wage growth, and regulatory uncertainty regarding energy prices. “This last factor was eliminated in the 2025 horizon after the president signed the act freezing energy prices. Additionally, inflation surprised positively again in September,” they note.
See also: “It's good, but it will get worse.” The MPC member estimated when the rates would fall at the earliest
At the same time, they point out that the reduction at the second meeting in a row contradicts the decision not to start the cycle, hence they believe that the MPC will wait until November. Then, MPC members will additionally become acquainted with new inflation forecasts, which – according to PKO BP economists – should show the indicator returning to the target of around 2.5%. in 2026
Economists have a similar argument Credit Agricole, Bank Pekao, Santander and ING Bank Śląski.
MPC decision. How do interest rates affect loan installments?
Interest rates set by the Monetary Policy Council and applicable at the National Bank of Poland indirectly (through market rates) affect the amount of loan installments, especially those with variable interest rates. When the National Bank of Poland raises rates, commercial banks increase the interest rates on loans, which increases the monthly installments. When rates are lowered, interest rates fall and loan repayments become lower.
What does it look like in concrete numbers? Rankomat.pl expert Jarosław Sadowski comes to the rescue and calculates that an example loan with typical parameters and an interest rate based on the WIBOR 3M rate in the amount of PLN 300,000. PLN, even before this year's first reduction in interest rates, the installment amounted to approximately PLN 2,191. Currently, in the same loan, after three rate cuts, it would drop to PLN 1,954.
See also: Rates down, but Poles are still cautious when taking out loans [SONDAŻ]
With a loan of PLN 500,000 PLN installments would drop from PLN 3,651 to PLN 3,256 at the same time. Similarly, for a loan of PLN 700,000. PLN monthly payments to the bank would decrease from PLN 5,112 to PLN 4,559.
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Jarosław Sadowski / rankomat.pl
If interest rates were cut by 0.25 percentage points, it would mean savings for borrowers of another several dozen or even several hundred zlotys.depending on the loan taken out.
For example, the installment of the previously mentioned loan for PLN 300,000. PLN would decrease by PLN 50 to PLN 1,916. For a commitment of PLN 500,000 PLN, the savings from another rate cut is PLN 83, and for PLN 700,000. PLN – PLN 116.
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Jarosław Sadowski / rankomat.pl
Author: Damian Słomski, journalist of Business Insider Polska
