Interest rates remain unchanged
The Monetary Policy Council (MPC) decided today to keep NBP interest rates unchanged, with the reference rate remaining at 3.75%. The MPC’s decision was consistent with both our forecast and market expectations. In its post-meeting press release, the Council again noted that “as a consequence of supply constraints related to the conflict in the Middle East, prices of fuels surged globally”. In the Council’s view, “given the tense geopolitical situation, the outlook for global activity and inflation has deteriorated and remains subject to uncertainty”. According to the Council, the increase in inflation from 3.0% YoY in March to 3.2% in April, according to Statistics Poland’s (GUS) flash estimate, was driven mainly by higher annual fuel price growth related to the conflict in the Middle East. The Council again stressed that the outlook for inflation and economic activity in Poland is currently “influenced by changes in macroeconomic situation abroad, including changes in global commodity prices and inflation, amid geopolitical context”. The Council also reiterated the main risk factors for the inflation outlook, namely “fiscal policy and regulation concerning fuel prices as well as changes in growth of activity in the Polish economy and further developments in wage growth”.
No room for interest rate cuts
The wording of the MPC’s post-meeting press release supports our scenario that NBP interest rates will remain unchanged for an extended period. We maintain our view that the conflict in the Middle East will contribute to a prolonged increase in crude oil prices, which are likely to remain significantly above their pre-conflict levels in the coming quarters. We continue to expect that, assuming the fuel market intervention mechanism remains in place, including reduced VAT and excise duty and a price cap, inflation will stay in the range of 3.0-4.0% YoY in the coming months and reach a local peak of 4.1% in December (see MACROmap of 6/04/2026). Elevated inflation will limit growth in domestic demand; however, domestic demand is set to remain strong in the coming quarters, supported by rising consumption and a recovery in investment. Consequently, we maintain our NBP interest rate forecast, according to which rates will remain at their current level until the end of 2027.
Growing likelihood of “signalling” interest rate hike
However, we see a significant risk of a one-off “signalling” interest rate hike in H2 2026, aimed at more firmly anchoring inflation expectations among households and businesses, thereby helping to reduce wage pressures and limit the risk of secondary inflationary impulses, or so-called second-round effects. We believe that the likelihood of such a hike increased after the release of the flash data on April inflation, which signalled a clear rise in core inflation (see MACROmapa of 4/05/2026). Our interest rate forecast is subject to considerable uncertainty regarding the further course of the conflict in the Persian Gulf region and the safety of shipping through the Strait of Hormuz, which may remain restricted despite a de-escalation of military action. A. Glapiński’s press conference tomorrow should shed more light on the monetary policy outlook.
Today’s MPC decision to keep interest rates unchanged, as well as the tone of the post-meeting press release, are – in our opinion – neutral for the PLN exchange rate and yields on Polish bonds.
