Poland Expected to Maintain Benchmark Interest Rate Amid Rising Inflation Concerns

Poland Expected to Maintain Benchmark Interest Rate Amid Rising Inflation Concerns

Lukasz Kowalczyk
2 min read

Poland Expected to Maintain Benchmark Interest Rate Amid Rising Inflation Concerns

Poland's Monetary Policy Council is set to leave its benchmark interest rate unchanged at 5.75% for the ninth consecutive month in the upcoming meeting on Wednesday. This decision aligns with expectations stemming from anticipated inflation upticks driven by escalating energy prices and surging wages. The central bank is also poised to unveil its inflation projections for July, offering valuable insights into their outlook on inflation trends.

Governor Adam Glapinski has underscored the unlikelihood of rate cuts until next year, particularly following the government's decision not to prolong the energy price cap. Economists project that inflation might hit a peak of around 5.3% in October, maintaining elevated levels until mid-2025 as the impact of heightened energy prices wanes.

Market stakeholders will be closely monitoring Glapinski's statements on Thursday for any indications regarding future monetary policies. Additionally, the governor is confronting a parliamentary probe instigated by the ruling coalition, alleging political intervention and irregularities in the central bank's bond acquisition program. These allegations have been refuted by Glapinski.

Key Takeaways

  • Poland poised to retain its benchmark rate at 5.75%.
  • Anticipated inflation peak at 5.3% in October 2024.
  • Potential rate adjustments expected in the first quarter of 2025.
  • Governor Glapinski embroiled in a parliamentary inquiry.
  • Inflation decelerated to 2.6% in June, down from 18.4% in 2023.


Poland's decision to maintain stable interest rates reflects a cautious stance amid burgeoning inflation triggered by the surge in energy expenses and wage increments. This course of action impacts both investors and consumers, leading to elevated borrowing costs in the short run and potential economic deceleration in the long term. The absence of rate cuts until 2025 indicates an extended period of monetary stringency. Governor Glapinski's parliamentary scrutiny introduces political uncertainties, influencing investor confidence and the central bank's credibility. Overall, Poland's monetary policy approach endeavors to balance inflationary pressures with economic stability, confronting challenges originating from internal political dynamics.

Did You Know?

  • Poland's Monetary Policy Council:
    • The Monetary Policy Council (MPC) in Poland serves as the central bank's decision-making entity responsible for defining the benchmark interest rate, exerting influence on economic growth, inflation, and overall financial stability. The MPC's determinations hold significant weight in managing the nation's monetary policy and are closely monitored by investors and economists.
  • Benchmark Interest Rate:
    • This rate, often denoted as the policy rate, signifies the rate at which commercial banks can borrow from the central bank. In Poland, the MPC dictates this rate, functioning as a benchmark for interest rates across diverse financial products and impacting borrowing expenses for businesses and consumers. Thus, the rate plays a pivotal role in economic activities and inflation management.
  • Inflation Projections:
    • Inflation projections embody foresights offered by the central bank regarding the anticipated inflation rate over a specific duration. These projections hold essential relevance for policymakers, aiding in devising suitable monetary policy measures. In the Polish context, the central bank's inflation forecasts for July furnish insights into their anticipations for inflation growth, influencing determinations concerning interest rates and other economic interventions.

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