NBP keeps interest rates unchanged eighth time in a row

Two-day May session of Poland's Monetary Policy Council (MPC) came to an end on Wednesday. The Council decided to leave the NBP interest rates at current levels. The main reference interest rate has been kept at 6.75% since September 2022.

On 9-10 May 2023 the Monetary Policy Council held a meeting at which it decided to keep the NBP interest rates unchanged:

- reference rate at 6.75% on an annual basis;

- lombard rate at 7.25% on an annual basis;

- deposit rate at 6.25% on an annual basis;

- rediscount rate at 6.80% on an annual basis;

- discount rate on bills of exchange at 6.85% on an annual basis;

The Monetary Policy Council's decision to keep the interest rates unchanged for eighth month in a row. The decision correspoonds with experts' forecasts. Economists claim that if the interest rates are to be decreased, it will only happen in the second half of the year. Some analysts argue that the right conditions for interest rates decrease will emerge no sooner than 2024.

The NBP President Adam Glapiński is expected to hold a press conference at 3 p.m. on Thursday (May 11).

The Council said in a press release regarding the decision "the weakening of the external economic conditions, together with a decline in commodity prices, will continue to curb global inflation, which will contribute to lower price growth in Poland". "The decline in domestic inflation will be supported by a weakening of GDP growth, including consumption, amid a significant decrease in credit growth."

"As a result, the Council assesses that the earlier strong monetary policy tightening undertaken by NBP will lead to a decline in inflation in Poland towards the NBP inflation target," the MPC said.

"At the same time, given the strength and persistence of the earlier shocks, which remain beyond the impact of domestic monetary policy, the return of inflation to the NBP inflation target will be gradual. The decrease in inflation would be faster if supported by an appreciation of the zloty exchange rate, which, in the Council’s assessment, would be consistent with the fundamentals of the Polish economy," the Council added.