According to the latest NBP statistics, out of PLN 500 billion of housing loans, PLN 6.5 billion is still in Swiss francs. With settlements and court cases, the problem of Swiss franc borrowers is forgotten. But almost twice as much amount, namely PLN 11 billion, concerns loans in another currency, mainly in euro. And these borrowers are interested in the decisions of the European Central Bank, which affect the interest rates on loans.
Read also: Inflation in the EU accelerated more than in Poland. New data
The Governing Council of the European Central Bank kept interest rates unchanged on Thursday, it said in a statement after the meeting.
The risk of inflation is growing
The decision was in line with the expectations of those surveyed by Bloomberg. During the previous five meetings, the ECB left interest rates unchanged. without changes. In the previous monetary policy easing cycle, the deposit rate was reduced by 175 basis points.
“The Governing Council decided to keep the three key ECB interest rates unchanged. Although the incoming information is broadly consistent with the Governing Council's earlier assessment of the outlook for inflation, the risks to an increase in inflation and a decline in economic growth have increased,” it said in a statement after the meeting.
“The war in the Middle East has led to a sharp increase in energy priceswhich increased inflation and negatively affected economic sentiment. The impact of the war on inflation and economic activity in the medium term will depend on the intensity and duration of the price shock on the energy market and the scale of its indirect and secondary effects. The longer the war continues and the longer energy prices remain high, the greater the likely impact on broader inflation and the economy. […] The interest rates on the central bank depository, main refinancing operations and central bank lending facility will remain unchanged at their levels, respectively: 2.00 percent, 2.15 percent and 2.40 percent” – added.
The statement said that the ECB remains well positioned to respond to increased uncertainty.
“The Governing Council remains well prepared to deal with the current uncertainty. The euro area has entered a period sharp increase in energy prices with inflation hovering around the 2% target and the economy showing resilience in recent quarters. Long-term inflation expectations remain well anchored, although inflation expectations over shorter horizons have increased significantly,” it said.
End of reinvestment in bonds
“The Governing Council will closely monitor the situation and apply a data-driven approach, setting the appropriate monetary policy stance from meeting to meeting. In particular, decisions on interest rates will be based on an assessment of the outlook for inflation and related risks, in the light of emerging economic and financial data, as well as the dynamics of underlying inflation and the transmission power of monetary policy. The Governing Council does not predetermine a specific path for interest rates,” it added.
Read also: Energy prices in Germany have jumped the most in years. There will be side effects
The ECB confirmed once again completion of reinvestment under the PEPP and APP programs.
“APP and PEPP program portfolios are being reduced at a specific and predictable rate because The Eurosystem no longer reinvests principal repayments on maturing securities” – it was written.
“The Governing Council stands ready to adjust all instruments within its mandate as appropriate to stabilize inflation at the 2% target over the medium term and maintain the smooth transmission of monetary policy. In addition, a transmission protection instrument is available to counter unjustified, uncontrolled market dynamics that pose a serious threat to the transmission of monetary policy in all euro area countries, so that the Governing Council can more effectively fulfill its mandate to maintain price stability,” it added.
After the decision is announced, the euro rate increases by 0.16%. against the dollar, to 1.1695. The yield on 10-year Bunds (German bonds) falls by 5 basis points. up to 3.06 percent
The next ECB meeting will be held on June 10-11. After the meeting, the latest macroeconomic projections will be presented.
