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

In August 2026, the Monetary Policy Council (MPC) kept interest rates unchanged at 5.25 percent, continuing a policy of stabilization in the face of an uncertain geopolitical situation between the USA and Iran. This decision means that the cost of money in the Polish economy remains frozen, which directly translates into the loan installment amounts for millions of households. The central bank determined that further monetary policy easing could undermine the stability of the zloty exchange rate in the face of rising external risks.

MPC decision in August 2026: Stabilization instead of easing

During its August meeting, the Monetary Policy Council decided to maintain the main reference rate at 5.25 percent. This is a defensive decision. After a two-year cycle in which we observed attempts to adjust the cost of credit to the changing economic situation, members of the Council concluded that the current level is an optimal protective barrier. The lack of changes in August is a direct continuation of the July stance. The market expected signals indicating further cuts, but the international situation forced a change in rhetoric.

The main factor determining this position is the escalation of tensions in the Middle East region. The conflict between the USA and Iran is translating into rising energy commodity prices, which is generating inflationary pressure in the Polish economy. MPC members concluded that any interest rate cuts could be perceived by financial markets as a sign of weakness. Consequently, this could lead to a weakening of the zloty against major currencies, which is excluded under current conditions.

For the banking sector, this decision means maintaining the status quo regarding margins and interest income. Borrowers were hoping for a drop in installments, but their expectations were met with the hard macroeconomic reality. The Council does not intend to risk price destabilization in a situation where the costs of imported energy remain a major question mark. Stabilization, although disappointing to many, is currently the only tool that allows for avoiding sharp exchange rate movements.

There is no room for sentiment here. The central bank's strategy is based on an analysis of core inflation data and the zloty exchange rate. Any sharp downward move at this moment could lead to an exodus of foreign capital from Polish bonds. The MPC prefers to wait out the period of uncertainty, observing how the situation in commodity markets develops. This approach is conservative, but consistent. Borrowers must come to terms with the fact that the 5.25 percent level remains the foundation upon which the valuation of their financial obligations is based.

The impact of geopolitical tensions on central bank decisions

The Council's August decision is not an isolated administrative act. It is a direct response to impulses coming from global markets. The conflict between Washington and Tehran has ceased to be merely a diplomatic issue. It has become an economic factor that influences decisions made at the headquarters of the National Bank of Poland on Świętokrzyska Street. Energy commodity markets react nervously to every report of possible sea strait blockades. This, in turn, translates into the valuation of oil and gas, which determine price levels in the Polish economy.

For the zloty, this situation is extremely difficult. The Polish currency is treated by investors as an asset with a higher risk level than the dollar or the euro. In the face of tensions in the Middle East, speculative capital is withdrawing from emerging markets. If the MPC were to decide on a rate cut, the difference in profitability between Polish debt securities and those of developed markets would widen even further. This is a direct path to a sell-off of the zloty.

Analysts emphasize that the room for interest rate cuts is currently limited by two main transmission channels. The first is the exchange rate channel, mentioned earlier. The second is the inflation channel. If energy prices rise as a result of oil supply blockades, consumer inflation in Poland could accelerate again. The MPC, remembering the fight against double-digit price growth from previous years, will not allow itself to make a mistake.

Council members are analyzing current futures contracts for oil. If the price of a barrel in global markets rises by another 10 percent, the chances of any cut in the fourth quarter of 2026 will drop to near zero. This is a hard lesson in economics. The central bank cannot stimulate economic growth at the cost of losing control over the value of money. The "wait and see" strategy in this case is not just a choice, but a necessity aimed at protecting the purchasing power of Poles' savings.

What does maintaining rates mean for your wallet?

Maintaining the reference rate at 5.25 percent has a concrete impact on household budgets. Let's look at a specific example. A borrower with a mortgage of 300,000 zlotys, taken out for 25 years, with a bank margin of 2 percent, must count on debt service costs oscillating around 2,165 zlotys per month. This installment is a result of the current level of the WIBOR rate, which reacts to MPC decisions. The lack of a cut means that this amount will remain stable in the coming months.

For those paying off variable-rate loans, this is a scenario of stagnation. Hopes for a return to lower installments, which many borrowers associated with expectations of an autumn cut, have been shelved. If you have a loan, there will be no additional room for consumption in your budget. Every zloty of your income that goes to the bank as interest remains at an unchanged level. This is a situation where the cost of living, combined with the cost of capital, creates pressure that you have to face every month.

The other side of the coin is savers. Maintaining interest rates at 5.25 percent means that banks will not be inclined to lower interest rates on deposits and savings accounts. Your deposits continue to earn based on current rates. This is good news for people building capital. However, it should be remembered that the real rate of return, i.e., profit after subtracting inflation, remains influenced by external factors. If inflation rises due to commodity prices, the real value of your savings may still fall.

Summary of the situation for August 2026:
- Main reference rate: 5.25 percent (level maintained).
- Loan installment (300,000 PLN, 25 years, 2% margin): approx. 2,165 PLN per month.
- Deposit interest rates: stable, dependent on the policy of individual commercial banks.

This is math without emotion. Your finances are directly linked to decisions made in Warsaw. Since the MPC is not cutting rates, you must assume that your debt repayment plan will not change downward. This is the time to verify expenses and potentially overpay the principal if your budget allows. Any overpayment at the current rate level is the most effective method of fighting debt service costs.

Historical analysis: From November 2024 to August 2026

The Monetary Policy Council has come a long way in the last two years. In November 2024, the reference rate was 5.75 percent. This was a time when the central bank communicated its readiness to fight persistent inflation, not excluding any scenario. The market was then expecting clear signals regarding the end of the rate hike cycle. The atmosphere in the Council was tense, and every decision sparked heated discussions among economists.

A year later, in November 2025, the Council decided to cut rates. It was the second autumn quarter that introduced 50 basis points of easing within a few months. This decision was dictated by a slowdown in economic dynamics and hopes for a permanent extinguishing of inflationary processes. Borrowers breathed a sigh of relief. Many of them assumed then that this was the beginning of a long downward trend that would lead rates to around 4 percent before the end of 2026.

Reality, however, proved more complicated. The escalation of conflicts in the Middle East in 2026 changed the balance of power. Instead of further cuts, the MPC had to switch to defensive mode. History shows that the Council is an institution extremely sensitive to supply shocks. While the autumn of 2025 was a time of optimism, August 2026 is a time of returning to roots – that is, protecting currency stability.

The evolution of the MPC's approach over this two-year period is a lesson in humility for every market participant. Economists who in 2025 forecast further cuts had to verify their models. The volatility of the external environment proved stronger than domestic premises for easing policy. This is painful for those who planned their finances based on a linear downward trend in rates. The history of the last 24 months shows that there is no room for certainties in monetary policy, and every decision is only as good as the current data from global markets.

Expert forecasts for the end of 2026

The Council's August meeting was a clear signal to analysts. The market consensus, which as late as June assumed at least one cut before the end of the year, has been revised. Experts now point to a scenario of stabilizing rates at 5.25 percent until the end of 2026. Everything depends on two key variables: the behavior of the zloty exchange rate and the dynamics of energy prices.

Analysts from leading financial institutions note that the MPC is in a trap. On one hand, we have a weakening industrial situation that would require cheaper credit. On the other hand, we have geopolitical risk, which dictates maintaining high rates to protect the currency. In such conditions, the central bank cannot satisfy everyone. It therefore chooses the lesser evil, which is stabilization.

Forecasts for the fourth quarter of 2026 suggest that if there is no drastic collapse in the markets, rates will not be touched. Experts add that possible cuts could only occur in a situation where tensions in US-Iran relations are extinguished and oil prices return to the levels of the first half of the year. However, this is a wishful scenario. Currently, markets price in no change as the most likely variant.

For borrowers, this means that one should not count on a "gift" from the MPC before the end of the year. If you are planning debt restructuring, you must rely on current costs. Do not expect banks to lower their offers on their own. In turn, savers can slowly start looking for alternative forms of capital allocation if banks start lowering deposit interest rates, even with an unchanged reference rate. The market is becoming increasingly demanding, and the stability declared by the MPC is the foundation upon which you must build your financial security.

Summary: Why is the MPC not cutting rates?

The Monetary Policy Council in August 2026 kept interest rates at 5.25 percent. This decision definitively ends the stage of speculation about quick cuts in the third quarter. The institution remains faithful to the policy of stabilization, which is a direct consequence of the situation between the USA and Iran. For every mortgage holder, this means an extension of the period of high debt service costs.

The central bank communicates clearly: there is no room for errors in monetary policy. Every move must be supported by hard data, and currently, this data indicates too high an external risk. The zloty, although trying to maintain its value, is under constant speculative pressure. In these conditions, a rate cut would be a high-risk move that the Council cannot afford.

Here are the main pillars of the current MPC strategy:
- Protection of the exchange rate: The MPC prioritizes the stability of the zloty to prevent the growth of imported inflation.
- Monitoring supply shocks: The conflict in the Middle East realistically affects energy costs, which limits the room for monetary policy easing.
- No premises for aggressive actions: Given the uncertainty regarding commodity prices, the Council prefers to keep ammunition for a time when the situation is clearer.

The "wait and see" strategy is the new normal. The premium for savers is maintained, but borrowers remain in limbo. The MPC chooses the financial security of the state over short-term growth stimulation. This is a painful but necessary compromise in current conditions. Anyone planning their finances for the autumn of 2026 must accept the fact that there will be no cheap money. The foundations of the Council's decisions are deeply embedded in geopolitical realities, not in consumer wishes. If you were counting on a cheaper loan, you must re-analyze your household budget.

What this means for you

Maintaining interest rates at 5.25 percent means no change in your loan installment. Debt service costs remain at a high level, which for many households is a challenge. On the other hand, savers can count on stable deposit interest rates, which in current conditions is a form of capital protection. The catch lies in inflationary risk – if energy commodity prices rise, the real purchasing power of your savings may suffer, despite rates being kept at a high level.

Questions and answers

Were NBP interest rates cut in August 2026?

No, the Monetary Policy Council decided to maintain the main reference rate at 5.25 percent.

How does the situation in Iran affect MPC decisions in Poland?

Geopolitical tensions in the Middle East generate the risk of rising energy commodity prices, which translates into inflationary pressure and forces the MPC to maintain a restrictive monetary policy to protect the zloty exchange rate.

When can we expect further decisions on changing rates?

The Council makes decisions cyclically at monthly meetings; further moves will be strictly dependent on the geopolitical situation, oil price quotations, and current inflation indicators in the coming months.

Will my mortgage installment fall in the near future?

The lack of a rate cut means no direct impulse for a drop in WIBOR rates, and thus your loan installment will remain at an unchanged, high level in the near future.

Why does the MPC not want to ease monetary policy if the economy needs an impulse?

Council members believe that in the face of external supply shocks, aggressive policy easing would be risky for currency stability and could lead to uncontrolled inflation growth.

Sources

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