Poland Monetary Policy April 2021


Poland: Central Bank on hold in April

April 7, 2021

At its meeting on 7 April, the National Bank of Poland (NBP) once again left the reference rate at its record low of 0.10%. The decision marked the tenth hold in a row and was in line with market expectations. The NBP also kept the lombard rate at 0.50%, the deposit rate at 0.00% and the rediscount rate at 0.11%. Moreover, the Bank reaffirmed its commitment to its quantitative easing program, with the continued purchasing of government bonds in the secondary market. It will also continue to discount credit aimed at refinancing loans granted to businesses by banks.

The decision to stand pat chiefly reflected the Bank’s efforts to cushion the ongoing impact of the pandemic and support the recovery. Incoming data for the first few months of 2021 is mixed, while rising coronavirus cases and the tightening of restrictions in March will likely have weighed on activity. Moreover, continued uncertainty over the course of the health crisis could hamper the recovery ahead. On the price front, inflation rose to a preliminary 3.2% in March amid higher fuel costs, reflecting rising global oil prices. Although the Bank sees price pressures intensifying further in the coming months, developments in the vaccination campaign, the gradually fading effects of the pandemic—which will ease supply-side factors that are currently pushing inflation up—and lower wage pressures are set to curb inflation over the longer term.

Looking ahead, the Bank’s monetary policy stance is expected to remain largely expansionary in order to support the economic recovery, which will also benefit from substantial fiscal support and new EU funding.

Reflecting on the outlook for monetary policy, Kevin Daly and Tadas Gedminas, economists at Goldman Sachs, commented:

“Polish inflation is likely to rise sharply in the months ahead, owing to the strong base effects in oil prices. The NBP has expressed willingness to look through the temporary inflation overshoot, and, consistent with our expectation that underlying inflation is weaker than suggested by the headline number, we do not expect the NBP to raise rates until 2022H2 (i.e., after the end of the current Council term). That said, given that the near-term spike in inflation is likely to coincide with a strengthening of growth as the economy re-opens, the economic backdrop is likely to remain hawkish in the near term.”

The next monetary meeting is scheduled for 5 May.

FocusEconomics analysts see the reference rate ending 2021 at 0.10% and 2022 at 0.30%.

Author:, Economist

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Poland Monetary Policy Chart

Poland Monetary Policy April 2021

Note: NBP Reference Rate in %.
Source: National Bank of Poland (NBP).

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