The upcoming meeting of the Monetary Policy Council is scheduled for April 8–9 and will be the first since the March decision to cut interest rates by 25 basis points, bringing the reference rate of the National Bank of Poland to 3.75%.
Inflation in Poland has declined significantly and is now close to the central bank’s target of 2.5% (±1 percentage point). This indicates that price pressures in the economy have weakened substantially, although inflation in the services sector remains relatively higher than in goods.
At the same time, the economy continues to grow at a moderate pace, suggesting stable macroeconomic conditions without signs of overheating. In such an environment, the central bank has room to pursue a more flexible monetary policy.
Following the March rate cut, the most likely scenario for the April meeting is that interest rates will remain unchanged at 3.75%, allowing policymakers to assess the impact of earlier monetary easing on inflation and economic activity. However, market expectations are also shaped by additional factors. In recent weeks, there has been a notable increase in IRS (Interest Rate Swap) rates, which reflect market expectations regarding future interest rates and the long-term cost of money. The rise in these rates may suggest that investors are pricing in greater uncertainty about further rate cuts or anticipating a more stable rate path.
Geopolitical developments represent an additional source of risk for monetary policy. The ongoing conflict involving Iran has significantly pushed up energy prices, with oil recently exceeding USD 110–116 per barrel. Tensions in the region are disrupting energy markets and the transportation of raw materials. Higher energy prices could once again increase global inflationary pressures in the coming months, posing a meaningful risk also for Poland. If oil prices remain elevated, central banks may be forced to adopt a more cautious approach to further rate cuts.
Overall, the baseline scenario for the Monetary Policy Council’s April 8–9 meeting is to keep interest rates unchanged at 3.75%. The Council is likely to adopt a wait-and-see approach, monitoring the effects of previous rate cuts as well as developments in global markets. At the same time, rising IRS rates and geopolitical tensions in energy markets are increasing uncertainty about the future path of interest rates, which may encourage a more cautious stance in the months ahead.
Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial or investment advice. It is general in nature and not addressed to any specific recipient. Before using this information for any purpose, independent professional advice should be sought.
