Interest rates in August 2026: will borrowers get a breather?

In brief

The MPC kept interest rates at an unchanged level in July and August 2026 in response to the escalation of the conflict in Iran.
Economist forecasts indicate that the economy will approach the optimal interest rate level no sooner than the end of 2026.
Despite the easing cycle that began in November 2025, the current geopolitical situation is forcing the MPC to be cautious in further policy loosening.

MPC decision: why do interest rates remain stable?

The month of August 2026 will not bring relief to those repaying mortgage loans in zlotys. The Monetary Policy Council is upholding its decision from July, keeping interest rates at an unchanged level. Market hopes for cheaper money have been brutally verified by the international situation, which has completely dominated the Council's meetings in recent weeks.

The main brake on cuts remains the escalation of tensions between the USA and Iran. This conflict, although taking place thousands of kilometers from Warsaw, directly hits the condition of the global economy. Investors are reacting nervously, withdrawing capital from emerging markets, to which Poland is still classified. In the face of such great uncertainty, the MPC is choosing a defensive strategy that excludes any monetary policy loosening this month.

For the central bank, interest rate stabilization is a tool to protect the zloty exchange rate from excessive volatility. Any downward move could be read by investors as a signal to sell off the Polish currency, which would consequently dangerously fuel imported inflation. The Council members have clearly decided that it is safer to wait out the geopolitical storm than to risk destabilizing the domestic exchange rate.

For borrowers, this is unequivocally bad news. The repayment schedule remains rigid, and debt servicing costs will not fall in August. Forecasts assuming a quick return to lower credit costs, drawn up just last year, are losing their relevance. At this moment, the NBP's priority is calm in the currency market, not household wallets. It looks like we will have to wait for real savings on installments until the global conflict is extinguished.

Evolution of monetary policy: from 2024 to 2026

Today's decision by the Monetary Policy Council to keep the cost of money at an unchanged level is not the result of a lack of will to loosen policy, but a reaction to the brutal geopolitical reality. The escalation of tensions between the USA and Iran has hit the zloty exchange rate, which has effectively blocked the space for any downward moves that borrowers were quietly counting on. The stabilization of interest rates in August 2026 is a hard brake, applied for fear of further destabilization of the national currency.

However, the history of recent years shows that the road to cheaper credit was not linear. The start of the easing cycle, which raised the hopes of many households, has been slowed down in recent months. Below we present how key parameters have changed over the last two years:

November 2024 — keeping rates at 5.75 percent (historical data)
November 2025 — the second "autumn quarter," i.e., a cut of 0.25 p.p. (Bankier.pl)

The difference between the enthusiasm of late 2025 and the current stagnation is striking. As recently as November of last year, the market believed that the cutting cycle would continue uninterrupted, and economists' forecasts suggested reaching an optimal level no sooner than the end of 2026. Reality turned out to be more complicated. Instead of a smooth march toward cheaper money, we received a series of fluctuations and uncertainty, which in mid-2026 turned into a defensive stance by the MPC.

For borrowers, this is a signal that real relief for household budgets will take much longer to arrive than was assumed as recently as the spring. The Council's current strategy is not so much a choice between economic growth and inflation, as an attempt to protect the zloty from external chaos. As long as the situation in the Middle East does not show signs of calming down, any moves toward cuts will remain in the realm of theoretical considerations, not real decisions.

Impact on borrowers: no relief in wallets

The Monetary Policy Council has made the decision to keep interest rates at an unchanged level. For thousands of Poles repaying mortgage loans, this means one thing: in August 2026, the amount of the installment will not fall. The lack of June and July cuts translates directly into a freeze on debt servicing costs based on the WIBOR rate, which remains unmoved. Borrowers' wallets will not feel any relief in the coming weeks.

The MPC's decision is not a surprise to analysts observing the currency market. The geopolitical tensions between the USA and Iran, which escalated in July, exerted clear pressure on the zloty exchange rate. The Council members clearly decided that in the face of such an unstable international situation, loosening monetary policy could weaken the national currency even further. Exchange rate stability has become more important than immediate support for loan holders.

Expectations for a quick return to low installments, which many borrowers built based on earlier announcements, must be verified. As early as March 2026, the Monetary Policy Council clearly communicated that the cutting cycle would be a process spread over time and that no sudden moves should be expected. Now these words are becoming a brutal reality. Borrowers must prepare for the maintenance of current debt servicing costs for the coming months. Hopes for significant monetary policy loosening in the third quarter of this year have expired, and the market is adjusting to a scenario in which the cost of money remains high in response to external factors over which domestic economic policy has negligible influence. Apartment owners with loans must tighten their belts and wait for the situation in the Middle East to calm down.

Savers and NBP policy: who loses and who gains?

The Monetary Policy Council's decision to keep the cost of money unchanged in August 2026 is news that cash holders probably don't need to be ashamed of. After months of systematic easing, which began back in the autumn of 2025, the slowing of the pace of cuts is a signal of stabilization. The tense situation between the USA and Iran, which directly affects the condition of the zloty, forced policymakers to revise their plans. Those who placed their savings in bank deposits have gained from this.

Maintaining the current level of rates is in practice a "freeze" of current bank offer interest rates, which for many households is a moment of relief. If the MPC had decided on another downward move, profits from deposits would have started to melt at a pace the market had become accustomed to since March 2026.

The mechanism is simple and brutal for the wallet: each subsequent interest rate cut, in line with the trend observed in recent quarters, translates directly into a decrease in deposit interest rates. At this moment, the situation looks as follows:

Keeping rates unchanged actually favors people with savings in deposits and savings accounts, because their profits did not fall overnight.
Each subsequent rate cut (in line with the trend since March 2026) means an automatic drop in deposit interest rates, which hits people avoiding stock market risk.
The balance between the attractiveness of deposits and the cost of credit remains the main challenge for the MPC, which must maneuver between the expectations of debtors and the needs of the capital market.

The Council's dilemma is obvious. Rates that are too high stifle borrowers, but rates that are too low – given the current geopolitical pressure – could trigger capital flight from the zloty. The current compromise is an attempt to maintain the attractiveness of saving in the country, even though for borrowers this means extending the period of high installments. The market is now watching to see if the August stagnation is just a temporary pause or a lasting change in strategy.

Geopolitics and the zloty: why does Iran matter for Polish rates?

The Monetary Policy Council did not decide to loosen monetary policy during its August meeting. Borrowers looking forward to installment cuts must arm themselves with patience, because the decision to keep interest rates at their current level is a direct consequence of tensions between the USA and Iran. Although we often forget about conflicts in the Middle East, in this case, foreign policy directly hits our wallets.

The escalation of the US-Iranian conflict is causing nervousness in global financial markets, which in practice means capital flight from assets perceived as risky. This group includes emerging markets, including Poland. The zloty is under clear selling pressure. A weakening currency is a warning signal for the central bank, which effectively blocks any room for maneuver regarding interest rate cuts.

The MPC cannot afford the risk of further weakening of the national currency. Fears of imported inflation, fueled by rising energy commodity prices and the weakening of the zloty, force policymakers to maintain a restrictive stance. In this clash, economics loses out to geopolitical security. As long as the situation in the Persian Gulf does not stabilize, pressure on the zloty will remain a fact, and this in turn cements the current level of rates.

For a mortgage holder, this means no breather. Instead of an installment cut, the market is receiving a message about the need to maintain great caution. In the current conditions, the central bank is betting on stabilization, ignoring the expectations of consumers wanting cheaper money. This is a classic example of a situation where events thousands of kilometers away determine the cost of debt servicing in a Polish home. Patience is the only tool available in this case.

Forecasts for the end of 2026

The Monetary Policy Council did not give borrowers a reason for optimism in August. The cost of money remains frozen, which translates directly into no changes in loan installments. NBP policymakers could not have acted otherwise in the face of instability in currency markets, where the zloty exchange rate came under strong pressure due to the escalation of geopolitical tensions between the USA and Iran.

Hopes for rapid monetary policy loosening are colliding with a hard reality in which external factors dominate domestic readings. Analysts who were charting paths back to an optimal level as recently as April 2026 must now revise their assumptions. At that time, it was assumed that we would approach it no sooner than the end of the current year, but the current situation in the Middle East is effectively verifying these optimistic scenarios.

The market is in limbo. Data from July 2026 clearly show that a consensus on the pace of further cuts has ceased to exist. Investors do not know what to expect from the Council's subsequent meetings, and the space to loosen the fiscal reins is becoming increasingly narrow. Ahead of us are months in which every communication from the central bank will be read through the prism of two variables:

Inflation data, which will indicate whether the domestic economy is able to withstand cost pressure on its own.
The development of the situation in the Middle East, determining not only the zloty exchange rate but also energy commodity prices, which for the MPC is an argument for maintaining high rates for fear of imported inflation.

It is difficult to provide an unambiguous message for households. If the conflict between the USA and Iran does not subside, dreams of cheaper credit before the end of the year may prove premature. The zloty, as an emerging market currency, is paying the highest price for this global unrest.

What this means for you

For borrowers, this means freezing installments at the current level with no chance for quick relief. On the other hand, savers can enjoy more stable deposit interest rates, but the catch remains the real value of money in the face of inflationary risk caused by external factors.

Questions and answers

Were interest rates cut in August 2026?

No, the MPC kept interest rates at an unchanged level, reacting to geopolitical tensions.

When can further rate cuts be expected?

Economist forecasts indicate that reaching the optimal interest rate level may occur no sooner than the end of 2026.

How does the situation in Iran affect my loan installments?

Tensions between the USA and Iran exert pressure on the weakening of the zloty, which forces the MPC to maintain higher rates to protect the currency, which blocks loan installment cuts.

Sources

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