LIBOR continues to fall. The three-month WIBOR (3M) has almost equaled what it was three months ago, pointed out economist Rafał Mundry. The interest rate on the loan depends on WIBOR, and thus the amount of installments paid. As noted by Mundry, further declines in WIBOR indices may mean that with the next interest rate update, some borrowers will see “slightly lower installments”.
WIBOR 3M has been recording a series of declines since November 30 this year. and ended the week at 7.16 percent. Its value is only 0.14 percent. higher than three months ago (7.15%). In turn, WIBOR 6M is 7.30 percent, at the level from August this year. Its value is about 4 percent. higher than in the same period six months ago (7.02%).
“Another week of decline. 3M has almost equaled what it was 3 months ago. At this rate, 6M in January will be lower than 6 months ago,” economist Rafał Mundry wrote on Twitter. As he noted, as a result, “borrowers should expect slightly lower installments at the next update of the interest rate, but literally by a few zlotys”.
WIBOR together with the bank’s margin are components of the loan interest rate. Some banks use the WIBOR 3M rate, which means that the interest rate on the mortgage loan is updated every three months from the moment the loan is launched. In the case of WIBOR 6M, the interest rate is updated every six months.
WIBOR rates are set every business day. Although the values of WIBOR 3M and WIBOR 6M rates have been falling in recent days, they do not immediately affect the amount of the installment paid. We will see the changes only when the interest rate on our loan is updated.
“RPP is no longer willing to raise rates”
The analyst pointed out that “it is increasingly said that the cycle of increases is behind us (at 95 percent).”. “It’s still not the end of growth inflation. But the MPC is no longer willing to raise rates,” he wrote.
In his opinion, therefore, further declines in WIBOR ratios are possible and it may fall below the level of the main, reference NBP rate, which is 6.75 percent. “Historically, it was below the NBP rate. It is possible this time, but in a few quarters. It depends on the persistence of inflation,” wrote Rafał Mundry.
The Monetary Policy Council on Wednesday, during the third decision-making meeting in a row, maintained NBP interest rates at an unchanged level. The next decision-making meeting is scheduled for January 3-4, 2023.
WIRON will replace WIBOR
Work is underway to replace the WIBOR index. The National Working Group for Benchmark Reform (NGR), established by the Office of the Polish Financial Supervision Authority, decided that WIRON (Warsaw Interest Rate Overnight) will be the new indicator for calculating loan interest rates.
From the publication at the end of September According to the road map, the withdrawal of products and instruments using WIBOR is to take place in 2024. The entire reform is to be completed in 2025.
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