Most economists surveyed by the European Financial Congress claim that only one reduction in interest rates from the current level of 3.75% may occur only in 2028-2029. reference rate. Until then, the consensus of their forecasts indicates that rates will remain unchanged.
On Tuesday, it turned out whether the Monetary Policy Council followed their intuition. Its members decided by majority vote that rates will remain unchanged, i.e. the main reference rate will be 3.75% for the next month.
The Council decided to keep all NBP interest rates unchanged, not only the reference one:
- reference rate 3.75 percent on an annual basis;
- lombard rate 4.25 percent on an annual basis;
- deposit rate 3.25 percent on an annual basis;
- rediscount rate of bills of exchange 3.80 percent on an annual basis;
- bill of exchange discount rate 3.85 percent on an annual basis.
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“Further decisions of the Council will depend on the incoming information regarding the prospects for inflation and economic activity in Poland. These prospects are currently influenced in particular by changes in the macroeconomic situation in the environment of the Polish economy, including changes in commodity prices and inflation around the world in the context of the geopolitical situation. The following also remain risk factors for the inflation outlook: shape of fiscal policy and fuel price regulationsand also changes in the dynamics of activity in the Polish economy and further development of wage dynamics” – we read in the MPC comment.
— As expected, the NBP reference rate was left at 3.75%. Inflation data for May gave the Monetary Policy Council space to continue monitoring the development of the macroeconomic situation in the coming months. The European Central Bank is deprived of such comfort, and in the face of rising inflation next week it will raise the deposit rate by 25 bp – commented Bartosz Sawicki, a data analyst from Exante.
“The inflationary earthquake in May took the pressure off the Monetary Policy Council, no matter how small it was. Stabilizing rates at least until the end of this year (and there is a good chance that 2027 as well) is the base scenario,” Bank Pekao economists comment on X.
“The risk is still elevatedbut in our opinion, inflation may remain within the acceptable range of deviations from the NBP target until the end of the year. In such conditions, rate increases will not be necessary,” PKO BP analysts say.
At the previous MPC meeting, only Joanna Tyrowicz voted for a 1 percentage point increase in rates. The rest of the Council, including NBP President Adam Glapiński, decided that the rates would be maintained.
Inflation forecast
Further developments in interest rates, which determine the monthly installments of most Polish borrowers, depend on inflation. The consensus of macroeconomists surveyed in the EFC panel assumes: CPI inflation returns to the Monetary Policy Council's inflation target (2.5%) in 2028-2029, 3.3 and 3.1 percent each. year-on-year average in 2026-27. The indicator would therefore be consistent with the forks.
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— May's positive inflation surprise and the retreat of the price of a barrel of Brent crude oil towards USD 90. immediately put an end to speculations about a hawkish turn by the Polish monetary authorities. The base scenario, unattainable for many central banks, is the stabilization of interest rates for the rest of the year, says Bartosz Sawicki.
What about loan installments?
FRA futures quotations predict that within the next six months the WIBOR 3M rate (the most frequently used mortgage interest rate) will increase from the current level of 3.86%. up to 4.01 percent However, in mid-May the interest rate was 4.13%, so there is an improvement for borrowers.
Rankomat's calculations for the WIBOR 6M rate show that if the FRA forecast came true and WIBOR 6M increased to 4.26%. from the current 3.94 percent, loan installment for PLN 500,000. PLN for 30 years would increase by PLN 113.
— The effects of the war in the Middle East are most visible not in the interest rates on variable-rate loans, but in in newly granted loans with fixed interest. Meanwhile, the latter have recently become more popular. The level of fixed interest depends on IRS 5Y quotations, the level of which increased significantly after the beginning of the conflict, especially in May. On May 19, they reached 4.79%. Fortunately, the prices have dropped and currently stand at 4.41%. This is still much higher than 3.7%. in February this year, but noticeably less than 4.79 percent. – comments Jarosław Sadowski, director of Rankomat's analysis department.
