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Poland Monetary Policy January 2023

Poland: Central Bank stands pat again at first meeting of 2024

At its 8–9 January meeting, the National Bank of Poland (NBP) kept its key reference rate unchanged at 5.75%, as had been widely expected by markets. The NBP also left all of its other rates unchanged, with the Lombard rate remaining at 6.25%, the discount rate at 5.85%, the rediscount rate at 5.80% and the deposit rate at 5.25%.

The NBP likely decided to hold as inflation has recently fallen thanks to a stronger zloty, easing supply chain disruptions, weak domestic activity and previous interest rate hikes. In December, inflation eased to 6.1% (November: 6.6%), the lowest rate since September 2021. Moreover, that same month, producer prices fell in year-on-year terms for the fifth month running.

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 the NBP to cut interest rates this year amid retreating inflation.

The next monetary policy decision will be taken on 6–7 February.

Rafal Benecki, economist at ING, commented:

“We assess the tone of the post-meeting statement as balanced and neutral but slightly more dovish than a month ago. Still, it does not indicate that the MPC is ready for 100bp of rate cuts as the market is pricing in by the end of 2024. The MPC is not concerned about the strengthening of the zloty, noting that it is in line with fundamentals.”

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