That’s why borrowers didn’t get a holiday gift. There is a message

The last meeting of the Monetary Policy Council (MPC) before the summer break ended on Wednesday. For the fourth time in a row, the body decided to leave interest rates at the current level.

After the July meeting of the Monetary Policy Council, interest rates remain at the following levels:

• 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.

Yesterday’s decision may be a disappointment for borrowers (the rate reduction is associated with a decrease in mortgage and corporate loan installments), but it must be remembered that recently the president of the National Bank of Poland (NBP) and chairman of the Council, Adam Glapiński, did not rule out the first interest rate increases in four years.

The Monetary Policy Council explains the decision on interest rates

In the statement issued immediately after Wednesday’s meeting, the Monetary Policy Council draws attention to, among others: to the fact that in June the prices of energy raw materials on world markets decreased, including a significant drop in the prices of crude oil. At the same time, the dynamics of economic activity in the immediate environment of the Polish economy remains weakened, and inflation – despite a recent decline – is higher than at the beginning of the year. The outlook for global activity and inflation is subject to uncertainty, in particular related to the conflict in the Middle East.

The Monetary Policy Council informs that it has become acquainted with the results of the July projection of inflation and GDP based on the NECMOD model. In accordance with the projection – prepared assuming unchanged NBP interest rates and taking into account data available until June 17 this year. – the annual price dynamics will be in the range of 2.4 – 3.3% with a 50% probability. this year (compared to 1.6 – 2.9 percent in the projection from March this year), 1.5 – 4.0 percent. next year (compared to 1.1 – 3.7 percent) and 0.8 – 3.9 percent. in 2028 (vs. 0.9 – 4.0%). In turn, the annual GDP growth rate according to the projection will be in the range of 3.0-4.4% with 50% probability. in 2026 (compared to 3.1 – 4.7 percent in the projection from March this year), 1.8 – 3.7 percent in 2027 (vs. 2.0 – 3.8 percent) and 1.9 – 4.1 percent. in 2028 (vs. 1.8 – 4.1%).

– In these conditions, the Council decided to keep interest rates unchanged – we read in the announcement.

The Monetary Policy Council indicates that its further decisions will depend on the incoming information regarding the prospects for inflation and economic activity in Poland. These prospects will be influenced in particular by the macroeconomic situation in the environment of the Polish economy, including the development of commodity prices and global inflation in the context of the changing geopolitical situation. The shape of fiscal policy, changes in the dynamics of activity in the Polish economy and further developments in wage dynamics also remain risk factors for the inflation outlook.

We can expect the next decision of the Monetary Policy Council on interest rates only in September. The August meeting of the Monetary Policy Council will be of an organizational nature only.