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Interest rates – June 2022. Meeting of the MPC on June 8

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On Wednesday, June 8, the Monetary Policy Council is to decide on the interest rates. Economists predict another hike – consensus is that the reference rate will rise by 0.75 percentage points to 6 percent. The MPC decisions have an impact on the level of loan installments.

The Monetary Policy Council raised interest rates by 75 basis points during its meeting in May. The main benchmark interest rate rose to 5.25 percent. This is the highest level since November 2008, at 5.75 percent.

NBP reference ratePAP / Maciej Zieliński

Interest rates and WIBOR

As a rule, MPC decisions have an impact on WIBOR, which at the same time translates into the amount of loan installments. The interest rate on loans consists of two elements: the bank’s margin and the ratio – most often WIBOR 3M or WIBOR 6M. Both these indicators already take into account likely decisions of the MPC in the future – in the next three or six months, respectively.

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READ MORE. How do interest rates translate into loan installments? Jarosław Sadowski from Expander Advisors explains >>>

The increase in interest rates is related to the rapidly rising prices. The Central Statistical Office reported in a preliminary estimate that the prices of consumer goods and services in May 2022 increased by 13.9 percent. year on year, and compared to the previous month they increased by 1.7%.

Interest rates – economists’ forecasts

Economists have no doubts that on June 8, the MPC will raise interest rates for the ninth time in a row. Many expect rates to rise again by 75 basis points on Wednesday.

– We will continue to raise rates until we are sure that it will be permanently (inflation – ed.) will lower. This is our task as the National Bank of Poland – said the president of the central bank and at the same time the chairman of the MPC Adam Glapiński during the press conference which took place on May 6 this year.

Therefore, according to economists, the MPC will decide on the next Wednesday an increase in interest rates.

In the commentary to the latest inflation reading in Poland, economists from PKO BP indicated that “the MPC may react with another, large rate hike”, in the range of 75-100 basis points.

Economists from Goldman Sachs, mBank and BNP Paribas also expect the Council to raise its key reference rate by 75 basis points. In turn, according to Morgan Stanley analysts, the Monetary Policy Council will slow down the pace of monetary policy tightening and in June it will decide to raise by 50 basis points.

READ MORE. Economists’ forecasts of interest rates >>>

Main photo source: Shutterstock

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