The Monetary Policy Council (RPP) cut interest rates by 0.5 percentage points, as the market had expected. It is the first such decision since 2023 and a signal of a change in monetary policy direction. What does it mean for borrowers, savers and the whole economy?
Why were interest rates cut?
Until recently, the RPP maintained a hawkish stance, refraining from changes for more than a year and a half. However, inflation in Poland has been steadily falling. In April it stood at just 4.2% year on year, far below the level during the last cut in 2023, when inflation reached 10%. In addition, the economy has clearly slowed and wage growth has cooled, prompting the Council to ease policy.
Who will benefit from lower interest rates?
The rate cut is good news above all for people repaying mortgages and consumer loans. Instalments on loans with variable rates could fall as early as the coming months. For example, the monthly payment on a 300,000 zloty mortgage may drop by as much as several dozen zloty.
Companies also stand to gain, as they can finance investments and ongoing operations more cheaply. This may stimulate investment and improve the situation in the labour market.
Do savers have reason to worry?
For people keeping money in deposits or savings accounts, the rate cut unfortunately means lower interest on their savings. Banks may soon lower deposit rates, meaning the real value of savings will grow more slowly, especially if inflation stays above the level of interest rates.
What next for interest rates?
Economists expect that the current cut may mark the beginning of a cycle of monetary easing. According to the President of the National Bank of Poland (NBP), Adam Glapiński, further cuts of 0.5 pp. are possible this year, and the target rate could fall to 3.5% in 2026. Everything depends, however, on further falls in inflation and the condition of the economy.
Key effects of the interest rate cut
- Lower instalments on mortgages and cash loans
- Potential growth in corporate investment
- Weaker interest on deposits and savings accounts
- Possibility of further cuts in the coming months
A 0.5 percentage point cut in interest rates is a clear signal that inflation is no longer the main threat, and that the real economy needs support. For borrowers it is a relief; for savers, a challenge. The RPP’s decision may mark the start of a new trend in Poland’s financial market.
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