Poland: Central Bank leaves rates unchanged in September
Latest bank decision: At its meeting on 3–4 September, the National Bank of Poland (NBP) decided to leave interest rates unchanged, with the reference rate at 5.75%, the Lombard rate at 6.25%, the deposit rate at 5.25%, the rediscount rate at 5.80% and the discount rate at 5.85%.
Monetary policy drivers: The key domestic factors influencing the decision on interest rates included a recent spike in inflation—which exceeded the NBP’s target range of 2.5–3.5% in July–August—due to increases in the administered prices of energy suppliers. Coupled with robust wage growth, this is set to keep inflation elevated in the coming quarters, motivating the Bank’s hawkish stance. Meanwhile, the economic recovery continued in Q2, further prompting the authorities to maintain tight monetary conditions.
Policy outlook: The Central Bank stated that it “will continue to take all necessary actions in order to ensure macroeconomic and financial stability, including above all to bring inflation down sustainably to the NBP inflation target in the medium term”. Additionally, it stated that it may intervene in FOREX markets. Meanwhile, at a subsequent press briefing, Governor Glapinski stated that rate cuts could begin in mid-2025, after previously ruling out any monetary policy easing until 2026. Accordingly, our panelists see rates ending the year at current levels and falling by about 100 basis points in H2 2025.
The Bank will reconvene on 1–2 October.
Panelist insight: ING analysts Rafal Benecki and Adam Antoniak commented on the outlook:
“Our baseline monetary scenario continues to assume that the first interest rate cut will take place in second quarter 2025 and that the main NBP rate could be cut by a total of 100bp next year. We expect inflation to ease to around 3-3.5% YoY in the second half of 2025, giving room for NBP rate cuts. We project the monetary easing cycle to continue in 2026, although probably on a smaller scale than in 2025.”