Monetary Policy Council raises interest rates third time in a row

Inflation in Poland, according to the Statistics Poland flash estimate for November 2021, increased to 7.7% in annual terms, and in monthly terms it amounted to 1.0%.

"The elevated inflation resulted, to a great extent, from external factors beyond the control of domestic monetary policy, such as higher than a year ago global prices of energy and agricultural commodities, earlier increase in electricity prices and in waste disposal charges, as well as rising prices of goods, whose supply has been constrained by global pandemic disruptions. The ongoing economic recovery, including demand driven by rising household income, has also added to the price growth," the Monetary Policy Council said in a statement on Thursday.

"In order to reduce this risk, i.e. striving to decrease inflation to the NBP target in the medium term, 3/3 the Council decided to increase NBP interest rates again. The increase of the NBP interest rates will also curb inflation expectations," we read in a press release at the Council's website.

"Decisions of the Council in the coming months will continue to be aimed at reducing inflation to a level consistent with the NBP inflation target in the medium term," we read.

The Council decided to increase the NBP reference rate by 0.50 percentage points, i.e. to 1.75%. At the same time, the Council set the remaining NBP interest rates at the following levels:

reference rate at 1.75% on an annual basis;

lombard rate at 2.25% on an annual basis;

deposit rate at 1.25% on an annual basis;

rediscount rate at 1.80% on an annual basis;

discount rate on bills of exchange at 1.85% on an annual basis.

The resolution of the Monetary Policy Council shall enter into force on 9 December 2021.