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Poland Monetary Policy May 2024

Poland: National Bank of Poland maintains rates in May

At its meeting on 8–9 May, the Monetary Policy Council of the National Bank of Poland (NBP) decided to keep 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%.

The key domestic factors influencing the Central Bank’s decision included the ongoing process of disinflation, driven by weak economic activity growth plus falling producer prices. Moreover, the Bank noted that core inflation eased in April.

The NBP provided no specific forward guidance on the future direction of interest rates. That said, the NBP did state that it judged current interest rates as “conducive” to meeting its inflation target; in line with this, the majority of our panelists see the Bank holding rates by year-end.

The NBP will convene next on 4-5 June.

Commenting on the outlook, ING’s Adam Antoniak and Rafal Benecki stated:

“We estimate that inflation is currently on an upward trend and will continue to rise until the end of the first quarter of 2025, with the rise reinforced by the unwinding of the energy price freeze. We also see the persistence of core inflation, mainly on the back of buoyant growth of services prices. In such an environment, the Council is likely to maintain a restrictive policy stance and hawkish rhetoric in the coming months. We expect NBP rates to remain unchanged until the end of 2024 and the monetary easing cycle to begin in 2025, when rates could be cut by a total of 75-100bp.”

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