Interest rates in August 2026: is the MPC planning changes?

In July 2026, the Monetary Policy Council kept interest rates at an unchanged level, which means that in August 2026, loan installment amounts remain stable. This decision, announced on July 8, ends speculation about a summer monetary policy easing in Poland. For millions of borrowers, this means that the interest rate on their liabilities – based on the WIBOR 3M index – will not budge up or down before the Council's September meeting.

Stabilizing the cost of money in the face of rising tensions in the Middle East is a choice of the lesser evil. The central bank could not afford a move that would further weaken the national currency. In the last month, the zloty lost about 12 groszy against the euro, reacting to concerns related to the situation between the USA and Iran. Any interest rate cut in such unstable conditions would be read by the currency market as a signal for a further sell-off of the zloty, which would directly translate into more expensive imports of raw materials and fuels.

MPC decision: Status quo in July 2026

Members of the Monetary Policy Council, analyzing incoming macroeconomic data, concluded that current conditions do not allow for the continuation of the rate-cutting cycle that began in November 2025. At that time, on November 5, the MPC decided on the second autumn reduction in the cost of money. Since then, the market had expected systematic easing, but geopolitical reality has brutally verified these assumptions.

Maintaining interest rates at the current level is a signal that the priority is to protect the purchasing power of the currency, not to stimulate demand through cheaper credit. The economy is in a wait-and-see phase. Institutional investors, in their statements after the July 8 meeting, emphasized that uncertainty regarding oil and gas prices, caused by the escalation of the conflict in the Persian Gulf, poses the main threat to price stability in Poland.

For decision-makers at the NBP, keeping inflation in check is key. Although the CPI index shows a certain tendency toward stabilization, it is not yet at a level that would allow for a sigh of relief. Any move toward rate cuts would have to be supported by solid data on falling wage pressure and the stabilization of inflation expectations. Currently, these conditions have not been met. The Council prefers to remain passive rather than risk a mistake that could cost the economy an increase in energy prices imported due to a weak zloty.

Geopolitics and the Polish currency: Impact of the USA-Iran conflict

The zloty exchange rate is currently the best barometer of investment sentiment. When the MPC was deliberating in Warsaw on July 8, financial markets were focused on reports of escalating military actions in Iran. The zloty, as an emerging market currency, always loses attractiveness in such moments. Investors flee to so-called safe havens, such as the dollar or the Swiss franc.

The weakening of the zloty by the aforementioned 12 groszy over the last thirty days is not just a statistic. It is a real cost for the Polish economy. Imported goods become more expensive, which in turn drives up production costs and, ultimately, prices on store shelves. The MPC, wanting to prevent imported inflation, must keep rates at a level that makes zloty-denominated deposits and bonds at least slightly more attractive to foreign capital.

If the Council had decided on a cut in July, the difference in profitability between Polish assets and those denominated in foreign currencies would have become even less favorable for the zloty. This could have triggered a wave of sell-offs that the central bank would have had to counteract using foreign exchange reserves or drastic hikes in the future. A "wait-and-see" strategy was therefore chosen. It is a conservative method, but in current political realities, the only one that can be defended against financial markets.

There is no room for sentiment here. Currency analysts agree that as long as the dust over the Persian Gulf does not settle, the zloty will be subject to high volatility. For the MPC, this means that until the situation calms down, any decision to cut rates will be sidelined.

Borrowers in August 2026: What does the lack of changes mean?

For a person repaying a mortgage of 500,000 zlotys, the MPC's decision means no change in the amount of the capital and interest installment in August. However, it is worth recalling the mechanism for calculating such a liability. Assuming a bank margin of 2 percentage points and the WIBOR 3M index, which currently reflects the market cost of money, the installment remains at the level from a month ago.

This stabilization has a flip side, however. A lack of cuts means no chance to relieve household budgets, which have been struggling with high debt servicing costs for years. It is worth analyzing what a borrower's portfolio would look like if there had been a quarter-percentage-point cut. With a 500,000 PLN loan spread over 25 years, a 0.25 p.p. cut would mean savings of around 80–100 zlotys per month. Although this is nearly 1,200 zlotys per year, for many Polish families, it is a significant difference in the household budget.

The Council's lack of action in July means that this money will stay in banks rather than in borrowers' wallets. This is the result of a policy that places the stability of the banking system and the currency above the current well-being of debtors. Borrowers must prepare for the fact that August will be a month in which their liabilities will not become cheaper.

It is worth remembering that the WIBOR 3M index, which is the basis for pricing most loans, does not always react fully to MPC decisions. It often prices in future Council moves in advance. If the market starts to believe in cuts in the fourth quarter of 2026, WIBOR will start to fall even before the central bank's formal move. For now, however, forecasts are pessimistic – the market sees no room for rapid easing.

Savers: Will deposits remain profitable?

For those with savings, the decision to maintain rates is neutral information, but in current conditions – rather positive. When interest rates stand still, banks have no incentives to sharply lower interest rates on deposits and savings accounts. Capital holders can therefore count on their current profits being preserved.

However, one must remember the real rate of return. If inflation remains above deposit interest rates, then despite nominal stability, capital in real terms loses value. This is precisely the biggest challenge for savers in August 2026. The lack of rate cuts by the MPC provides some psychological comfort, but it does not guarantee protection against inflation.

Commercial banks, having access to a stable cost of money, do not feel the need to fight for retail deposits by offering promotional rates. There is stagnation in this market segment. Clients looking for profits must therefore look for alternative forms of investment, because traditional deposits in August will remain a tool used only to limit losses, not to multiply wealth.

It cannot be ignored that the MPC's policy is also aimed at ensuring that savings do not flee the banking system. Maintaining rates at the current level is intended to keep capital in banks, which ensures liquidity for the financial sector in difficult geopolitical times. For the saver, this means predictability, but also no prospects for rapid growth in capital gains.

Labor market and GDP: Foundations of the MPC decision

Every decision of the Monetary Policy Council is supported by analyses of the condition of the real economy. In July 2026, when the fate of interest rates was being weighed, Council members had to take into account two contradictory signals. On one hand, we have solid GDP growth dynamics, which suggests that the economy is able to withstand higher costs of money. On the other hand, the labor market is beginning to show signs of a slight slowdown, which is a natural process in the face of the tightening cycle that lasted for a significant part of the previous years.

The foundation of every decision, however, is the fight against inflation. The Council has repeatedly emphasized in its communications that until price pressure in the services sector falls to the inflation target, there is no point in thinking about aggressive easing. The MPC's schedule of actions, which we can trace from November 2025, clearly shows that the Council is not prone to rash moves. The first autumn cut of 2025 was a signal that the MPC saw room for action, but subsequent international events, such as the escalation in Iran, effectively slowed this process down.

It is worth citing facts from the history of recent months that shape the current landscape of monetary policy:
- 05.11.2025: The MPC decides on a rate cut, which was the second such decision in the autumn.
- 13.04.2026: Direct Money publishes forecasts indicating a long stabilization cycle.
- 08.07.2026: The Council makes the decision to maintain rates, reacting to geopolitical tensions.

These dates are turning points. They show that monetary policy is not conducted in a vacuum. The real economy, based on GDP and employment, must be in balance with monetary policy. If economic growth is too strong and rates are too low, inflation may spiral out of control. If, on the other hand, rates are too high, we will stifle the economy. The MPC is currently trying to find this extremely narrow margin of safety. For now, however, in August 2026, the status quo dominates the agenda, and borrowers must prepare for stable, though still demanding, financial burdens.

Forecasts for the end of 2026: When will there be real cuts?

The prospects for the end of 2026 are currently determined by external factors over which Poland has no direct influence. Economists from major analytical centers agree: we will reach the optimal level of interest rates at the earliest by the end of 2026. This forecast, formulated at the end of 2025 by Forbes experts, is now becoming an increasingly likely scenario.

Why is the end of the year so important? First, it is the time when the base effects of high energy prices should expire. Second, it is a period when the geopolitical situation may clarify – elections in the USA and a possible calming of tensions in the Middle East may bring stabilization to currency markets. Only in such conditions will the MPC be able to afford a bolder policy.

Anyone who counted on seeing the first significant drops in installments in August must revise their assumptions. The current MPC strategy is a stalling game, but from the point of view of responsibility for money – it is a rational game. The stability that decision-makers talk about, in practice, means maintaining the status quo for the citizen for the coming months. Cheap money is unlikely to appear this year, and every borrower should plan their household budget based on current, high debt servicing costs.

Long-term scenarios indicate that we will be dealing with a slow, almost imperceptible process of cuts for the wallet. One should not expect sudden moves that would be a "game changer" for the real estate or consumer loan market. The market must come to terms with the fact that the cycle of potential cuts is strongly dependent on the stabilization of the external situation, which remains unpredictable.

What this means for you

For the average Pole, the MPC decision means no changes in the household budget. Those with savings in deposits benefit, as they do not lose on interest, while borrowers must arm themselves with patience – the expected drops in installments have been postponed due to the unstable situation in the world.

It is worth remembering that in economics, a lack of change is often the best possible news. It ensures predictability, which allows for planning expenses in the long term. Although the lack of cuts is not very satisfying, sudden upward moves would be a much worse scenario for anyone who has a variable-rate loan.

Questions and answers

Will loan installments fall in August 2026?

No, due to the maintenance of interest rates at an unchanged level in July, loan installments in August will remain at their current level.

Why is the MPC not lowering interest rates?

The decision results mainly from pressure on the zloty caused by the tense geopolitical situation between the USA and Iran and the need to stabilize the economy and fight inflationary pressure.

When can real rate cuts be expected?

Experts indicate that reaching the optimal level of interest rates may occur at the earliest at the end of 2026, provided that the external situation allows for safe monetary policy easing.

What impact did the situation in the Middle East have on the MPC's decision?

Tensions between the USA and Iran led to a weakening of the zloty against major currencies, which forced the Council to take a conservative stance to avoid imported inflation resulting from more expensive energy raw materials.

What does the lack of rate changes mean for deposit holders?

It means maintaining the current interest rates on savings products, which ensures a certain stability of profits, although the real rate of return remains heavily influenced by the CPI inflation index.

What data is key for future MPC decisions?

The Council monitors primarily GDP growth dynamics, the situation in the labor market, and inflation indicators, treating them as foundations for forecasting the future cost of money in the Polish economy.

Sources

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