Will interest rates fall in August 2026? MPC decisions

The Monetary Policy Council is keeping interest rates at an unchanged level, and PIE analysts point out that the key factor for future decisions is the escalation of the conflict in the Middle East. The National Bank of Poland's main reference rate has remained at 5.75 percent since July. This decision is the result of an assessment of external risks that dominated the central bank's agenda in mid-2026.

NBP's defensive strategy

Members of the Monetary Policy Council did not decide to move toward lowering the cost of money in August 2026. Maintaining the reference rate at 5.75 percent is a signal to the market that stabilizing the zloty exchange rate and protecting against imported inflation remain the priority. Tensions between the USA and Iran are translating directly into global oil prices. Every fluctuation in energy commodity prices exerts pressure on the Polish currency, which, in the eyes of policymakers, rules out aggressive rate cuts.

National Bank of Poland building in Warsaw.

The currency market is currently pricing in geopolitical risk, which limits the room for maneuver for national monetary authorities. Foreign investors are observing the situation in Tehran and Washington, which results in nervousness in zloty trading. In this situation, the MPC avoids actions that could be perceived as a sign of weakness. Keeping the cost of credit at a high level is intended to prevent capital flight from the Polish debt market.

Schedule of MPC meetings in 2026

The Monetary Policy Council works according to a fixed calendar, which determines the rhythm of changes in monetary policy. The next decision-making meetings are scheduled for September 2–3 and October 7–8, 2026. The subsequent meeting, which will be crucial for the end of the year, will take place on November 4–5, 2026. Investors and borrowers should take these dates as reference points for updating market forecasts.

Previous practice shows that the Council waits for hard macroeconomic data before making a decision to change rates. November 2025 brought the last significant downward correction. Since that moment, the cycle of cuts has slowed down. A Forbes economist pointed out at the end of last year that reaching an optimal level would take time, and the earliest realistic date is the end of 2026. Today, this scenario seems to be in question due to the international situation.

Impact of the decision on the banking sector and household budgets

High interest rates translate into the costs of servicing mortgage and investment debt. Borrowers who were counting on quick relief in 2026 must confront their plans with the current financial reality. The lack of movement in August means that repayment schedules remain unchanged. Commercial banks show no inclination to lower margins because the cost of obtaining capital on the interbank market remains under the influence of the NBP's restrictive policy.

The profit and loss balance of the banking sector indicates a clear polarization. On one hand, banks profit from high interest on loans; on the other, there is growing pressure to raise deposit interest rates to retain customer funds. This mechanism of capital redistribution within the economy is currently the main stabilizer of liquidity. People with savings in deposits benefit from maintaining the 5.75 percent reference rate, while those in debt bear the burden of geopolitical risk.

The export sector is in a difficult position. A weak currency, which theoretically favors selling products abroad, is neutralized by more expensive imported components. Rising energy and fuel costs, resulting from the escalation in the Middle East, limit the competitiveness of Polish companies. The MPC must therefore balance between the desire to stimulate growth and the need to curb price pressure.

Risk of imported inflation

Analysts at the Polish Economic Institute emphasize that Polish monetary authorities do not operate in a vacuum. The national economy is highly dependent on global energy supply chains. The conflict in Iran directly affects the price of a barrel of oil, and these translate into transport and production costs in Poland. The Monetary Policy Council recognizes that in the face of such high uncertainty, loosening monetary policy would be premature and dangerous.

Forecasts regarding cuts are shifting over time. The zloty, which is under constant pressure from investors avoiding emerging markets during periods of instability, forces the NBP to be cautious. Any decision to cut the cost of money in current conditions could trigger a wave of currency sell-offs. This, in turn, would lead to an increase in imported inflation, which the central bank wants to avoid at all costs.

Outlook for the end of 2026

August 2026 will go down as a month of waiting. The Council will not take any steps until the geopolitical picture becomes clearer. Borrowers must prepare for an autumn with installments that are not decreasing. The lack of changes in August is a continuation of the "wait and see" policy, which, in the face of global turmoil, is the only safe way out for the Polish financial system.

Stock market charts and financial analysis on a monitor.

In public debate, there are voices calling for support for the economy through cheaper credit, but a conservative trend prevails within the Council. MPC members point out that monetary stimulation at a time when inflation still shows signs of stickiness would be a mistake with long-term consequences. Money in Poland remains expensive, and its price depends on events that are happening thousands of kilometers from our borders.

This phenomenon, called "imported uncertainty" by economists, is becoming a dominant feature of the Polish financial market. Previous years accustomed market participants to focusing on the domestic CPI indicator. Today, it is necessary to follow news from the Middle East, as that is where decisions are made about whether the cost of debt service will rise or fall in the coming months.

For stock market investors, this means that the banking sector will remain under pressure, and for business owners – the necessity to include high debt service costs in investment plans for the rest of the year. Stabilization is the keyword, although in practice it means a lack of any relief. The Polish economy is in a phase of waiting for an external impulse that would allow for a return to the normalization of monetary policy.

If the situation in Iran does not calm down, rates may remain at their current level for much longer than until December. This is not good news for the real estate market or for consumers, but from the point of view of protecting the value of money, the MPC leaves itself no other choice. Stability above all. This is the new rule of the game that market participants must accept in the second half of 2026.

There are no indications to suggest that the August meeting was the last one where a decision was made to keep rates on hold. On the contrary, messages coming from the MPC suggest that every subsequent decision will be equally cautious. For savers, the current state is a time of harvest; for borrowers – a time of trial. Regardless of views, the facts remain unchanged: money in Poland remains expensive, and its price depends on events that are happening thousands of kilometers from our borders.

It should be noted that all forecasts that appeared in the media last year have been verified by reality. No one assumed that tensions between the USA and Iran would take such a form that they would affect the level of Poles' loan installments in such a direct way. This shows how globalized today's economy is and how quickly local finances can react to distant crises.

For those wondering about the future, August is a moment to summarize financial actions taken so far. If household budgets are tight, the MPC's decision to keep rates on hold is a clear signal not to count on any relief in the coming weeks. Financial planning should be based on the assumption that the 5.75 percent reference rate will be with us for a long time. This is the pragmatism that today's economic situation requires.

In summary, the MPC's decision to keep interest rates at an unchanged level in August 2026 is a confirmation of the trend we have been observing for months. The Polish economy must demonstrate resilience to external shocks, and monetary policy plays the role of a shield in this process. For borrowers, this means a more difficult time, but for the stability of the zloty – a necessity. Every MPC meeting is now a lesson in geopolitics that each of us learns while paying off our installments.

Questions and answers:

Did interest rates fall in August 2026?
No, the Monetary Policy Council kept interest rates at 5.75 percent, continuing the July policy.

Why is the MPC not lowering interest rates?
The main reason is the escalation of the conflict in the Middle East, which exerts pressure on commodity prices and the zloty exchange rate, forcing the Council to maintain a defensive monetary policy.

When can we expect real cuts?
Experts predict that a return to the path of cuts will be possible at the earliest by the end of 2026, provided the geopolitical situation stabilizes.

The MPC's decision not to make changes in August is an expression of caution in a world full of risk. The Monetary Policy Council is betting on currency stability at the cost of temporary relief for debtors. This is the price that the Polish economy is paying for protection against inflation driven by global tensions. Every borrower should treat this announcement as a signal to maintain budget discipline in the coming months. Uncertainty in the Middle East is now the main factor determining the level of loan installments in Poland, and its impact on MPC decisions remains undeniable.

PIE analysts do not foresee a quick end to this state of affairs. Each passing month brings new data, but the direction of NBP policy seems to be set in stone. As long as geopolitical risk is not neutralized, there is no room for errors in managing the cost of money. Borrowers must arm themselves with patience, as a return to cheaper financing is dependent on factors over which Polish financial authorities have zero influence.

The current state is not the result of a lack of tools, but a conscious choice. The MPC has the instruments to lower rates, but it recognizes that the risk to the zloty is too great. This conscious decision for stagnation is the best proof of how seriously the Council takes the current international situation. Borrowers must understand that in current conditions, it is not their comfort that is the priority, but the safety of the entire financial system.

Could anything change this state before the end of the year? Only a sudden de-escalation of the conflict and a return to price stability in fuel markets. Until then, all that remains is to observe the MPC's actions and wait for moods in the world to calm down. August will be another month in which wallets will feel no relief, and monetary policy will remain a hostage to global politics. This is a reality that in 2026 has become the new norm for every loan holder in Poland.

The financial market has noted that since November 2025, when the last significant downward correction of rates took place, the easing cycle has clearly slowed down. The autumn quarter of cuts a few months ago was a signal that the MPC intended to gradually return to normality, but 2026 brought a turn in rhetoric. Currently, no one on the Council wants to risk loosening policy when the zloty exchange rate is under constant pressure from foreign investors fleeing risk. Any decision to cut the cost of money in such realities would be read by the markets as a signal of weakness, which could trigger a wave of sell-offs of the Polish currency.

Borrowers who were counting on quick relief must revise their expectations. Forecasts saying that an optimal interest rate level would be reached at the end of 2026 are becoming increasingly difficult to maintain. The economy is functioning in conditions of high volatility, where decisions from Warsaw are hostages to events in Tehran or Washington. The lack of movement in August is confirmation that the MPC is not planning any surprises before the end of the third quarter.

The foundation of this strategy is protecting the purchasing power of the zloty. A weak currency means more expensive fuels and raw materials, which in the face of a global conflict is a scenario that the National Bank of Poland wants to avoid at all costs. Analysts note that as long as crude oil prices on world markets remain at an elevated level and military risk in the Middle East does not decrease, the MPC will keep rates at the current level. This approach, although costly for debtors, is intended to guarantee the anchoring of inflation expectations.

For mortgage holders, this means stabilization of installments at the level that formed in the first half of the year. The lack of cuts in August means that the repayment schedule will not undergo any change favorable to the client. Household budgets must be adjusted to the cost of money at the 5.75 percent level long-term. There are no signs that commercial banks will offer cheaper financing in the near future, because the cost of obtaining capital in the interbank sector also remains high.

Historically speaking, November 2025 was a turning point in which the market believed in a lasting downward trend. Today, that belief has been severely shaken. A Forbes economist pointed out at the end of last year that we would reach an optimal level at the earliest by the end of 2026. Current data seem to confirm this pessimistic scenario. The Monetary Policy Council acts in a highly reactive manner, adjusting its decisions to current inflation readings and the international situation, rather than to previously assumed schedules.

The situation is dynamic. Every report of escalation in Iran causes an immediate reaction in the currency market. The zloty reacts nervously, which confirms the Monetary Policy Council in the conviction of the correctness of the current strategy. There is no talk of loosening monetary policy when the foundations of the currency are so uncertain. Borrowers remain in limbo, counting on an improvement in global sentiment that could open the way for cuts in the coming months.

What does this mean for you? First of all, the necessity to maintain financial liquidity at the current level. There is no point in counting on a gift in the form of a lower installment in August. If you are planning to take on a new obligation, you must take into account that the cost of money will remain high. Only those with savings gain, for whom the current level of rates ensures a real return on deposits.

Analyzing reports from July, it is difficult to find even one argument for changing course. The 5.75 percent reference rate is considered a protective barrier. Of course, in public debate, there are voices calling for support for the economy, but a conservative trend prevails in the Council. MPC members point out that monetary stimulation at a time when inflation still shows signs of stickiness would be a mistake with long-term consequences.

For the average Pole, this means that decisions made in Warsaw are largely determined by distant conflicts. This is a new reality to which one must adapt. The credit market has frozen in anticipation of the de-escalation of international tensions. Investors are not pricing in any cuts in the coming quarter. All forecasts about cheaper credit are moving to next year, provided that the situation in the Middle East does not deteriorate further.

Ultimately, if the situation in Iran does not calm down, rates may remain at their current level for much longer than until December. This is a scenario that is increasingly being taken into account by analysts. It is not good news for the real estate market or for consumers, but from the point of view of protecting the value of money, the MPC leaves itself no other choice. Stability above all. This is the new rule of the game that we must accept in the second half of 2026.

There are no indications to suggest that the August meeting was the last one where a decision was made to keep rates on hold. On the contrary, messages coming from the MPC suggest that every subsequent decision will be equally cautious. Is this good or bad? The answer depends on which side of the market you are on. For savers – it is a time of harvest. For borrowers – a time of trial. Regardless of views, the facts remain unchanged: money in Poland remains expensive, and its price depends on events that are happening thousands of kilometers from our borders.

This phenomenon, called "imported uncertainty" by economists, is becoming a dominant feature of the Polish financial market. Previous years accustomed us to focusing on the domestic CPI; today, we must follow news from the Middle East. That is where decisions are made about whether you will pay more or less for your loan in August. The Monetary Policy Council is only the executor of this difficult lesson in geopolitics.

It should be noted that all forecasts that appeared in the media last year have been brutally verified by reality. No one assumed that tensions between the USA and Iran would take such a form that they would affect the level of Poles' loan installments in such a direct way. This shows how globalized today's economy is and how quickly local finances can react to distant crises.

For those wondering about the future, August is a moment to summarize financial actions taken so far. If your household budgets are tight, the MPC's decision to keep rates on hold is a clear signal not to count on any relief in the coming weeks. Financial planning should be based on the assumption that the 5.75 percent reference rate will be with us for a long time. This is not pessimism, it is the pragmatism that today's economic situation requires.

In summary, the MPC's decision to keep interest rates at an unchanged level in August 2026 is a confirmation of the trend we have been observing for months. The Polish economy must demonstrate resilience to external shocks, and monetary policy plays the role of a shield in this process. For borrowers, this means a more difficult time, but for the stability of the zloty – a necessity. Following the Council's announcements in the coming months will allow you to determine the rhythm of your financial life until the end of the year. Every MPC meeting is now a small lesson in geopolitics that each of us learns while paying off our installments.

Sources

Article prepared by the Wiadomości PRO editorial team with the support of artificial intelligence. Facts come from the sources listed above.