The Monetary Policy Council (RPP) has made a long-awaited decision: interest rates in Poland have been lowered by 50 basis points, marking the first rate cut in over a year. What does this mean for borrowers, how has the Council justified its move, and what might come next?
“Złoty loan holders had to wait quite a while for a decision from the RPP that would ease their monthly payments,” says Krzysztof Pawlak, currency analyst at InternetowyKantor.pl. “Since October 2023, the cost of money had been held at 5.75%, with no changes for 17 consecutive meetings. Yesterday, the Council decided to cut rates by 50 basis points, bringing the main reference rate down to 5.25%.”
While analysts had broadly expected a rate cut—anticipation had been growing for months—opinions were divided on the size of the reduction. So, how did the RPP explain its choice?
“The decision itself wasn’t a surprise. During the April meeting, Professor [Adam] Glapiński had already signaled a more dovish shift in the Council’s stance, effectively foreshadowing a cut in the near future. Still, analysts were split between expectations of a 25-, 50-, or even 75-basis-point move. The RPP cited falling current inflation, lower price growth forecasts, weakening wage pressure, and a slowdown in economic momentum as the main reasons for the decision,” Pawlak explains.
This rate cut is a welcome relief for current mortgage holders and good news for prospective borrowers. “Those with złoty-denominated loans will soon feel the impact in the form of smaller monthly installments—depending on how frequently their interest rates are updated, such as with the 3-month or 6-month WIBOR. For new borrowers, lower interest rates mean improved creditworthiness, potentially increasing loan eligibility by several thousand PLN,” Pawlak adds.
Interestingly, the rate cut also comes at a politically sensitive time. “It’s notable that the decision was made just ten days before the first round of presidential elections,” Pawlak points out. Maciej Przygórzewski, chief currency analyst at InternetowyKantor.pl, adds: “Given this timing, it’s worth watching to see whether this is a one-off move or the beginning of a broader easing cycle. A key press conference today may shed more light on the Council’s future direction. Still, from a macroeconomic standpoint, there has been ample room for rate cuts.”
Source: Manager Plus – RPP Cuts Rates but Glapiński Cools Expectations
