Monetary Policy Council raises interest rates by 0.25 points

On 7 September 2022 the Monetary Policy Council held a meeting. The Council decided to increase the NBP interest rates by 0.25 percentage points.

The Council set the NBP interest rates at the following levels:

- 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 resolution of the Monetary Policy Council (MPC) shall enter into force on 8 September 2022.

"Inflation in Poland – according to Statistics Poland flash estimate – increased in August 2022 to 16.1% y/y. High inflation results mainly from an earlier strong rise in global energy and agricultural commodity prices – driven, to a large extent, by the repercussions of Russian military aggression against Ukraine – and earlier increases in regulated domestic tariffs on electricity, natural gas and thermal energy," the Council said

"Consequences of disruptions in global supply chains and passing by enterprises rising costs on to the final prices also boost inflation, simultaneously adding to higher core inflation. In turn, a curbing impact on inflation has been exerted by a reduction in some tax rates as part of the Anti-inflationary Shield," the MPC added.

The Monetary Policy Council also assessed that "there persists a risk of inflation running above the NBP inflation target in the monetary policy transmission horizon". "In order to reduce this risk, i.e. striving to decrease inflation to the NBP target in the medium term, the Council decided to increase NBP interest rates again. The increase of the NBP interest rates will also curb inflation expectations" - we read.

"Further decisions of the Council will depend on incoming information regarding perspectives for inflation and economic activity, including the impact of the Russian military aggression against Ukraine on the Polish economy."