National Bank of Poland Holds Rate as Expected

The National Bank of Poland held its reference policy rate at 3.75% in its June 2026 meeting, maintaining the rate at its lowest level in four years, as widely expected by markets. The hold contrasted with what is likely to be a rate hike by neighboring Eurozone countries next week, consistent with a relatively stable zloty and recent evidence of price stability in the Polish economy. The latest data showed that headline inflation eased to 3.1% in May from 3.2% in the earlier month, well below market expectations of 3.6% to push back against concerns that the surge in energy prices since the war in Iran would trigger an entrenched increase in consumer prices.

The National Bank of Poland left its key reference rate unchanged at 3.75% for a second consecutive meeting on May 6, 2026, in line with expectations, citing uncertainty surrounding the geopolitical outlook and its potential impact on the economy. The lombard and deposit rates were also held steady at 4.25% and 3.25%, respectively. The decision comes as inflation in Poland rose for a second consecutive month to 3.2% in April, near the 3.5% upper limit of the central bank’s target range, driven by higher energy prices amid the conflict with Iran. In March, the central bank cut borrowing costs by 25bps, just days after the war in the Middle East began, but has since shifted to a more cautious, wait-and-see stance.

The National Bank of Poland held its benchmark interest rate steady at 3.75% during its April meeting, in line with market expectations. The optimism expressed in the previous meeting regarding the conflict in the Middle East has since diminished, with inflation projections now subject to heightened uncertainty and unlikely to return to the NBP's 2.5% target before the end of next year. Headline inflation rose to 3%, its highest level in eight months, up from 2.1% in February, driven largely by a sharp increase in fuel prices, while annual wage growth in the enterprise sector remained unchanged. Economic growth is projected to slow in the first quarter of 2026, reflecting supply-side constraints, from a 4% expansion at the end of 2025. Future decisions will depend on incoming information regarding inflation and economic activity, as the NBP warns of rising global commodity prices, fiscal policy and regulation concerning fuel prices and developments in wage growth.