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Poland Monetary Policy December 2023

Poland: Central Bank stands pat again at final meeting of 2023

At its 5–6 December meeting, the National Bank of Poland (NBP) kept the key reference rate unchanged at 5.75%, as had been widely expected by markets. The NBP also left all of its other rates unchanged, keeping the Lombard rate at 6.25%, the discount rate at 5.85%, the rediscount rate at 5.80% and the deposit rate at 5.25%.

The NBP decided to hold due to moderating inflation amid recent zloty appreciation. Additionally, easing supply chain disruptions, weak domestic activity and previous interest rate hikes continued to support the disinflationary trend: Inflation eased to 6.5% in November (October: 6.6%). Moreover, producer prices fell again in year-on-year terms in October.

In its communiqué, the NBP reiterated its commitment to base upcoming decisions on inflation and economic activity data, while remaining ready to “take all necessary actions in order to ensure macroeconomic and financial stability,” including intervention in the foreign exchange market. Our panelists expect interest rates to decline next year amid retreating inflation.

The next monetary policy decision will be taken on 8–9 January 2024.

Rafal Benecki, economist at ING, commented on the monetary policy outlook:

“In our view, the MPC is likely to refrain from changing the main parameters of monetary policy in 2024, awaiting important administrative decisions for the inflation profile (regulated energy prices, shield measures, VAT on food) and information on the scale of fiscal expansion in 2024. The MPC is likely to make its first serious consideration regarding the level of rates in March.”

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