NBP monetary council keeps interest rates unchanged

According to the decision of the MPC, the deposit rate stands at 5.25%, the lombard rate at 6.25%, the rediscount rate for bills remains at 5.8%, and the discount rate for bills stays at 5.85%.

The MPC meeting concluded on Wednesday after two days of deliberations.

The MPC last reduced interest rates in October 2023, when the rates were cut by 0.25 percentage points.

According to the Council, inflation in the coming quarters "will remain markedly above the NBP inflation target, driven by the effects of earlier increase in energy prices, as well as planned increase in excise duties and administered services prices."

"In the medium term – under the current NBP interest rates level and amid the expected gradual decline in wage growth – inflation should return to the NBP target," the MPC said in a statement released following the December meeting.

"However, developments in energy prices, due to their probable unfreezing in the second half of 2025, as well as the impact of elevated energy price growth on inflation expectations, remain an uncertainty factor for the expected horizon for the return of inflation to the target. Inflation developments over the medium term will be also affected by the further fiscal and regulatory policy measures, the pace of expected economic recovery in Poland and the labour market conditions," we read.

"Against this background, the Council decided to keep the NBP interest rates unchanged. The Council judges that the current level of the NBP interest rates is conducive to meeting the NBP inflation target in the medium term," the MPC concluded.

According to analysts from PKO BP, "The MPC did not surprise and left the rates unchanged." "December marks the 15th consecutive month with the reference rate at 5.75%. We will have to wait until spring for a rate cut," they stated in their post on X.

"It went without any fireworks," analysts from mBank began their post on X. "Interest rates remain at 5.75% (in our view, until March next year, when we expect them to drop to 5.25%)," they added.

"The formalities have been completed - RPP announced its decision after the December meeting: NBP rates remain unchanged. We are awaiting tomorrow's press conference by the NBP President (more eagerly) and today's post-meeting statement (less so). Our scenario of cautious interest rate cuts next year remains intact," analysts from Alior Bank said on X.

Analysts from ING Bank Śląski highlight that external conditions and domestic data indicate a "need for lower interest rates." They add that "the chances for an earlier move or a deeper cut in the first step have increased."

"RPP's decision to keep rates unchanged was no surprise, but the timing of the announcement was. External factors (potential deeper ECB rate cuts) and domestic data have 'moved on,' suggesting the need for lower rates (weak recovery in consumption after the floods, dismal private investments, frozen energy prices, lower inflation expectations). We await the RPP's response," experts from ING Bank Śląski assessed.

President of the NBP, Adam Glapiński, is to hold a press conference on Thursday, December 5, at 3:00 p.m.

The latest December projection of inflation and GDP is to be presented on Friday, December 6, at 12:00 p.m.