The Monetary Policy Council left interest rates unchanged at its April meeting, in line with market expectations. After seven rate cuts since May 2025, amounting to a total of 200 basis points, the National Bank of Poland’s main policy rate now stands at 3.75%.
Changes in the macroeconomic environment, including the escalation of the conflict in the Middle East, have significantly altered perceptions of the future path of monetary policy. The sharp rise in energy commodity prices, especially oil and gas, has increased the risk that inflationary pressure may become more persistent. As a result, markets have stepped back from expectations of further rate cuts, a shift that is also reflected in recent comments from Monetary Policy Council members.
Although the scale and duration of geopolitical tensions remain uncertain, they are likely to determine the strength of the supply shock affecting the economy. Poland’s preliminary consumer inflation reading for March came in at 3.0% year on year, below the market consensus of 3.3%, but clearly above February’s 2.1%. This suggests that price pressure may once again be starting to build.
In these conditions, the Monetary Policy Council has adopted a wait-and-see approach, choosing to monitor incoming data before taking further action. At the same time, financial markets are already pricing in a more restrictive scenario. Interest rate futures currently point to expectations of two rate hikes over the coming quarters.
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