Interest Rate in Poland
Poland - Interest Rate
Central Bank slashes rates to fresh all-time low in May; reaffirms quantitative easing
On 28 May, the National Bank of Poland (NBP) slashed the reference rate from 0.50% to a new record low of 0.10%, in a further bid to mitigate the fallout from coronavirus. In addition, the Central Bank cut the Lombard rate to 0.50%, the rediscount rate to 0.11%, while keeping the deposit rate unchanged at 0.00%. At the same time, the Bank reaffirmed its commitment to support liquidity in the financial markets and contribute to the normal functioning of the banking system.
The Bank’s decision was prompted by the marked economic impact of the health crisis and lockdown, compounded by associated downside pressures on prices. In an effort to support lending at favorable rates, the Bank cut rates and stated it will discount credit granted to enterprises by banks aimed at refinancing loans. Moreover, the NBP reaffirmed its quantitative easing program, announcing it will keep purchasing government bonds in the secondary market to keep providing liquidity to the government bond market.
Looking ahead, the monetary policy stance will likely remain largely accommodative, in order to underpin the labor market and the economy and as inflation is set to move below the Central Bank’s 2.5% target. The spread of Covid-19 and associated containment measure took a heavy toll on economic activity in Q1 and sentiment indicators, coupled with April’s retail sales and industrial production data, point to an even sharper blow to the economy in Q2. Meanwhile, in terms of price pressures, shrinking domestic demand and lower commodity prices should lead to a significant decrease in inflation in the short- to medium-term.
The next monetary policy meeting is scheduled for 16 June.
Commenting on the meeting, Rafal Benecki, Poland chief economist at ING, stated:
“We think this rate cut has entered the area of increasing side effects of low rates, mainly threatening the stability of the financial sector. Also, the experiences of other countries show that near-zero rates likely result in credit availability deteriorating rather than improving. So, we don’t expect the central bank to test negative interest rates.”
FocusEconomics analysts are still taking into consideration the latest economic developments.
Poland - Interest Rate Data
|Policy Interest Rate (%)||2.00||1.50||1.50||1.50||1.50|
5 years of economic forecasts for more than 30 economic indicators.
Poland Interest Rate Chart
Source: National Bank of Poland.
|Bond Yield||2.07||-0.30 %||Dec 31|
|Exchange Rate||3.79||-0.53 %||Jan 01|
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May 29, 2020
Consumer prices fell 0.2% over the previous month in May, following April’s 0.1% dip, according to provisional data released by the Poland’s Statistical Institute (GUS).
May 29, 2020
In the first quarter, the economy grew 2.0% year-on-year in unadjusted terms, according to a second estimate released by Poland’s Statistical Institute (GUS).
May 29, 2020
On 28 May, the National Bank of Poland (NBP) slashed the reference rate from 0.50% to a new record low of 0.10%, in a further bid to mitigate the fallout from coronavirus.
May 25, 2020
Retail sales nosedived 22.6% year-on-year in April amid lockdown (March: -7.0% yoy), marking the steepest fall on record.
May 25, 2020
Manufacturing-sector business confidence recovered some lost ground in May, although it remained deeply entrenched in pessimist terrain due to measures to contain the spread of Covid-19.