Interest rates will remain unchanged until the end of 2024, most economists believe. However, there are also voices for a reduction, already this fall.
The Monetary Policy Council (MPC) left it at its May meeting interest rates unchanged. When can we expect changes in monetary policy?
Interest rates in 2024 and 2025. Forecasts
The Council's decision – according to ING Bank analysts – was in line with market expectations. The bank's economists believe that an argument for a cautious approach to possible policy easing is, among other things, persistently high core inflation.
Therefore – in the opinion of ING Bank – the Council will maintain a restrictive attitude and hawkish rhetoric in the coming months.
“We expect that NBP rates will remain unchanged until the end of 2024, and the monetary policy easing cycle will begin in 2025, when rates may be reduced by a total of 75-100 basis points,” they added.
“We believe that unfavorable short-term inflation prospects will be the main argument for the Monetary Policy Council not to reduce interest rates. This is consistent with our scenario of stabilizing interest rates at the current level until the second half of 2025.” – Credit Agricole economists pointed out in their commentary.
“We assume that the level of 5.75% will remain with us throughout 2024 and even 2025,” Pekao analysts wrote in a comment posted on social media. Also, according to mBank economists, when it comes to monetary policy, “we will continue until 2025.”
In turn, the Polish Economic Institute (PIE) announced in its commentary that it forecasts “a small reduction in interest rates by 0.25 points in November, due to the easing of policy by major central banks, such as the Fed and the ECB.”
May decision of the Monetary Policy Council
At the meeting that ended on Thursday, the Monetary Policy Council did not change interest rates.
Interest rates currently:
- reference rate – 5.75 percent on an annual basis,
- lombard rate – 6.25 percent on an annual basis,
- deposit rate – 5.25 percent on an annual basis,
- rediscount rate of bills of exchange – 5.80 percent on an annual basis,
- bill of exchange discount rate – 5.85 percent on an annual basis.
Inflation and interest ratesPAP
The Monetary Policy Council last reduced interest rates in October 2023 – by 25 points. base, to the current level.
Main photo source: Radek Pietruszka/PAP