Interest rates at 5.75 percent: Is this the end of the era of stabilization in Poland?

The Monetary Policy Council (MPC) maintained interest rates at 5.75 percent in November 2024, and in mid-2026, these decisions remain a key reference point for the market in the face of tensions between the USA and Iran. The era of cheap money has definitively become history. Investors and borrowers must come to terms with the fact that a return to easing policy will not happen in the coming months.

The genesis of the decision: Why 5.75 percent in November 2024?

The November 2024 decision of the Monetary Policy Council, setting the main reference rate at 5.75 percent, was the result of a cold calculation of inflation risk while simultaneously taking into account the slowdown in GDP growth. At that time, members of the Council argued that this level was sufficient to extinguish secondary inflationary effects, assuming a gradual easing of tensions in supply chains. Economic fundamentals seemed stable, and NBP forecasts assumed a return to the inflation target within a two-year horizon.

Today, looking at the calendar from August 2026, that move seems to have been the final chord of predictable monetary policy. Back then, the priority was domestic consumption and the fight against labor shortages, which were driving wage growth. No one in 2024 assumed that the main regulator of Polish interest rates would become the yield on 10-year bonds, reacting with a delay to every statement coming from Tehran. The November compromise from nearly two years ago became a foundation that currently prevents any flexibility.

Monetary policy in Poland has ceased to be autonomous since that moment. Maintaining the 5.75 percent rate in 2024 was supposed to be a "safe haven," but by mid-2026, this haven has turned into a cage for policymakers. The MPC cannot afford a cut because the currency market verifies every move of the central bank through the prism of the zloty-to-dollar parity. If the MPC decided to move downward under the current scale of geopolitical tensions, it would have to reckon with a rapid outflow of foreign capital, which would drastically increase the costs of financing national debt. This was not a strategy for years, but a temporary state of equilibrium that was irretrievably lost the moment global liquidity began to flow toward assets considered safer.

It is worth recalling that as early as November 2025, as reported by Bankier.pl, the Monetary Policy Council carried out a second autumn "quarter-point" cut, which was intended to stimulate the economy before winter. However, as the latest analyses by Parkiet from July 2026 indicate, that enthusiasm was brutally crushed by the escalation of armed conflicts. The current situation is the result of rigidly sticking to parameters that have ceased to be adequate to market reality.

Geopolitics and the zloty exchange rate: July 2026

July 2026 reports clearly indicate that the expectations of investors counting on monetary easing were wrong. Instead of discussions about stimulating growth, the currency market is preoccupied with news about trade route blockades. The yield on 10-year treasury bonds, which broke through key resistance levels in mid-2026, became a signal to the MPC that the market currently does not accept any actions that could weaken the zloty.

The impact of these tensions on the Polish economy is direct and painful. The weakening of the national currency automatically raises the costs of importing energy resources, which translates into higher producer inflation. As a result, even if domestic demand shows signs of cooling, the MPC must keep rates at 5.75 percent to counteract imported inflation. This is a mechanism in which the Polish borrower pays for currency stability, while global financial markets discount the risk of war in bond prices.

Analysts point out that in July 2026, volatility in the currency market reached levels unseen since the energy crisis. As noted by the editorial team of INNPoland, institutional investors, fearing for the security of energy supplies, are withdrawing from emerging market assets, including Poland. In such conditions, an interest rate cut would be perceived by the market as a sign of weakness, which would lead to a sell-off of the zloty and even higher debt servicing costs. The Monetary Policy Council has found itself on the defensive. Instead of managing the business cycle, it is currently managing systemic risk. The stabilization of rates, which was supposed to last a quarter or two, has entered a chronic phase, determined by factors over which no MPC member has any influence.

What do experts forecast for the second half of 2026?

Analyzing the financial situation in the second half of 2026 requires abandoning optimistic scenarios. Experts from leading brokerage houses, publishing their reports in July 2026, unanimously point to a lack of consensus on the date of the first rate cut. While in the spring of 2026 there was talk of a possible policy easing in the third quarter, current market conditions have completely ruled out such a variant.

A key indicator that analysts are looking at is the difference in yields between Polish and German bonds. The increase in this spread proves that foreign investors are demanding a higher risk premium for holding Polish debt. In such an environment, the MPC cannot take the risk of easing monetary policy, as it would threaten a rapid capital outflow, which would hit the stability of the banking sector.

Most economists currently assume a "higher for longer" scenario, which means that the 5.75 percent rate may persist not only until the end of 2026 but also in the first quarter of the following year. The market no longer has a clear consensus on the date of the first cut, which translates into higher financing costs for businesses. Companies, when planning their investments, must currently assume a cost of capital at a level that excludes the financing of low-profitability projects. This hampers private investment and affects GDP dynamics in subsequent quarters. According to forecasts by TotalMoney.pl, the path of interest rates has become bumpy, and borrowers must prepare for a long-term presence of rates at the current level.

Impact of the decision on borrowers' wallets

Maintaining rates at 5.75 percent since November 2024 is a challenge that millions of borrowers must face every month. The lack of movement from the MPC means that mortgage installments remain at an unchanged, high level, which for many households means the necessity of drastically limiting consumer spending.

The mechanism of passing interest rates onto loan interest is based on WIBOR 3M and 6M rates. These, in turn, are closely linked to expectations regarding the future path of NBP rates. Since the market sees no prospects for cuts, these rates remain "anchored" at high levels. Borrowers cannot count on the "breather" that was speculated about at the beginning of 2026. Moreover, in the face of growing uncertainty in global markets, commercial banks maintain high margins, which further burdens household budgets.

For a mortgage holder, the lack of changes in rates is a state of permanent suspension. On one hand, the lack of further hikes is positive, but on the other, the lack of cuts excludes the chance for a reduction in installments. In conditions where the global political situation dictates the terms of the domestic economy, borrowers must come to terms with the fact that their wallets will remain under pressure for a long time. The central bank prioritizes macroeconomic stability over immediate relief for citizens, which is a difficult decision, but from an institutional perspective – the only one possible in the face of the need to defend the currency.

Savers: Are deposits still profitable?

Savers in Poland have found themselves in a trap of predictability. Maintaining rates at 5.75 percent since November 2024 has meant that interest on bank deposits has ceased to be dynamic. Banks, not feeling pressure from the NBP to raise deposit rates, offer interest that in many cases barely covers inflation. The lack of any cuts in the first half of 2026 maintains this status quo but does not give capital holders hope for higher profits.

Financial institutions, operating in conditions of stable rates, are optimizing their interest margins. This means that the profit from a deposit for an individual client is currently limited to a minimum. Moreover, the real value of savings is threatened by potential turbulence in the currency market. If the situation in commodity markets were to force the MPC to take drastic steps in the future, savers would be the first to feel the effects of this turbulence in their wallets.

In this puzzle, banks remain the main beneficiaries of stabilization. While for households the profitability of savings remains trapped within the limits set in the autumn of 2024, capital remains dormant. Bank clients must face the reality in which interest rates have been a nearly unchanging reference point for them for nearly two years. The lack of movement up or down has become the new norm that rewards patience but effectively limits the appetite for profit. Investors looking for higher rates of return are forced to move capital to external markets, which further weakens the Polish savings base.

Position of the NBP and the government: Scenarios for the future

The official position of the NBP remains unchanged: the priority is fighting inflation and stabilizing the zloty. Since November 2024, by maintaining rates at 5.75 percent, the Monetary Policy Council has consistently emphasized that any premature policy easing would be a mistake. Monetary authorities, despite enormous external pressure, remain on the defensive, avoiding sudden moves.

The strategy adopted by policymakers is based on several pillars that determine future decisions:

The Monetary Policy Council regularly analyzes macroeconomic data, with particular emphasis on wage dynamics and energy prices, avoiding declarations about rapid monetary policy easing.
Decisions on interest rates remain a key tool for fighting inflationary pressure, which makes maintaining the 5.75 percent level a barrier against the effects of global geopolitical uncertainty.

The lack of changes in interest rates does not, however, mean inaction. The government and the NBP, although they rarely speak with one voice, seem to be holding a common front on the issue of fighting inflation. For borrowers, this means freezing installments at a level that for many households is already the upper limit of financial endurance. The international situation effectively rules out optimistic scenarios regarding cuts, which were speculated about as recently as the spring of 2026. Financial institutions clearly signal that as long as the global situation does not stabilize, the cost of money in Poland will remain high. This is a wait-and-see policy intended to protect the economy from sudden shocks, even at the cost of a temporary slowdown in investment.

What this means for you

Maintaining interest rates at 5.75 percent means for borrowers a continuation of predictable, albeit high, debt servicing costs. If you have a mortgage of 500,000 PLN, your installment at this rate level remains stable but dangerously high. With interest rates of around 8-9 percent (including the bank's margin), the monthly cost of servicing the debt oscillates around 4000-4500 PLN, depending on the loan period. If the MPC lowered rates by 1 percentage point, your installment could fall by about 300-400 PLN, which at current food and energy prices would be a noticeable relief. The lack of this move means that throughout 2026 you will be paying the bank an amount higher by several thousand zlotys per year compared to an optimistic scenario. Savers gain stable deposit interest, but the real return on capital remains under pressure from rising prices. The most important catch remains inflation, which in the shadow of geopolitical conflicts may force the MPC to change its strategy in the coming months if the situation leads to further spikes in energy commodity prices.

Questions and answers

Why are interest rates in Poland not falling?

The Monetary Policy Council maintains rates at 5.75 percent due to the need to stabilize the economy and inflationary pressure, which in the face of global geopolitical uncertainty remains the main threat to the zloty.

Do tensions in the Middle East affect my loan?

Yes, these tensions translate into higher bond yields and pressure on the zloty, which forces the MPC to take a cautious approach to rate cuts, which directly keeps loan installments at a high level.

What to expect from MPC decisions until the end of 2026?

Experts point to high uncertainty and the dependence of further moves on inflation indicators and the geopolitical situation, which suggests that maintaining the current rate level is the most likely scenario.

How does the current situation affect my savings?

The stabilization of rates means no impulse for deposit interest growth, which, combined with inflation, means that the real return on savings remains limited and capital loses value.

Were the forecasts from the beginning of 2026 accurate?

Forecasts from April 2026, assuming a bumpy path for rates, proved accurate in their assessment of the need for the central bank to maintain extraordinary caution.

Why is bond yield so important for a borrower?

Bond yield is a barometer of economic risk; its high level signals to investors that the Polish economy requires high interest rates to attract capital and maintain currency stability.

Does the MPC plan any changes in the coming months?

Based on current communications and market analyses, no rapid course changes are expected, as the priority is stabilizing the financial system in the face of external shocks.

What are the chances of a rate cut before the end of 2026?

The chances for a cut are currently minimal, as the financial market is not pricing in such a move, and the international situation makes it impossible to take actions to stimulate the economy.

Does inflation in Poland have a chance to fall quickly?

As long as global commodity prices remain high, inflation dynamics may remain at a level exceeding the central bank's targets.

How are commercial banks behaving in this environment?

Banks are maintaining high margins and a cautious lending policy, which results from high financing costs and uncertainty about the future path of interest rates.

Is rate stabilization the new norm?

Yes, in the face of no prospects for a rapid end to international conflicts, the current rate level has become the new norm for the market, around which financial forecasts are built.

What is the biggest threat to my household budget?

The biggest threat remains the high cost of debt servicing persisting for a long time and the risk of a renewed rise in inflation resulting from external factors.

Does the government have an influence on MPC decisions?

The MPC is an independent institution that makes decisions based on macroeconomic analyses, although a common front with the government on the issue of fighting inflation is visible in media reports.

Is it worth taking out a mortgage now?

The decision about a loan depends on an individual's financial situation, but at the current 5.75 percent rate level, the cost of capital is high and must be included in long-term budget planning.

What is the main difference between 2024 and 2026 in monetary policy?

In 2024, the priority was domestic inflation, whereas in 2026, the main factor determining rate policy became the global geopolitical situation and pressure on the zloty.

***

*(Additional analysis deepening the topic)*

It is worth adding that in the current realities of 2026, the Polish banking system is showing great resilience, which is thanks to high interest rates that have allowed banks to rebuild their own capital. However, as reports in wGospodarce indicate, for the average household, this resilience of the financial sector is felt as a barrier to entry into the real estate market. Young Poles, planning to buy their first apartment, must currently have a much higher down payment because creditworthiness at a 5.75 percent rate drops drastically.

The bond market, which is under constant observation by analysts at Direct Money, also reflects investors' anxiety about the stability of the state budget. With the persistently high cost of servicing public debt, every zloty spent on interest on treasury bonds is a zloty missing from spending on infrastructure or healthcare. This is a vicious circle in which the stabilization of interest rates, intended to protect the zloty, simultaneously limits the country's development potential in the long term.

Analyzing reports from April 13, 2026, one can conclude that MPC policymakers already foresaw the difficulties they would encounter in the third and fourth quarters. Their caution, often criticized by politicians, stems from a desire to avoid a scenario in which Poland would have to ask for support from international financial institutions. Maintaining the 5.75 percent rate is the price for peace in the currency market.

For entrepreneurs, this situation means the necessity of revising business plans. Projects that seemed profitable two years ago have become risky at the current cost of capital. Companies are limiting employment, which can be seen in data on wage dynamics, which have begun to slow down. This is a natural process of cooling the economy, which is painful but necessary in the face of a supply shock caused by external factors.

It is worth noting that the Polish zloty, despite the pressure, is doing relatively well against other currencies in the region, which is a direct effect of the aforementioned MPC policy. Foreign investors value the predictability of the central bank, even if it is at the cost of a high burden for domestic borrowers. This "cage" for policymakers, mentioned earlier, is in reality a shield protecting the country from drastic exchange rate fluctuations, which in an open economy could lead to an import catastrophe.

In summary, the second half of 2026 is a time of adaptation. Borrowers, savers, and entrepreneurs must understand that in the face of global turmoil, the autonomy of monetary policy remains limited. The stabilization of rates at 5.75 percent is not a temporary state to which we became accustomed in 2024-2025, but a new reality that we will have to face for a long time. Every subsequent MPC decision will be analyzed not in terms of domestic GDP growth, but in terms of currency security and debt market stability. This is a lesson in humility for the Polish economy, which after years of dynamic development must now show resilience to global uncertainty.

Will we see cuts in 2027? Everything depends on how quickly tensions in the Middle East subside and how the approach of major central banks, such as the Fed or the ECB, to interest rates changes. For now, however, the MPC's priorities remain rigid: inflation must be crushed, and the zloty must remain stable. This is a difficult path, but in current conditions – the only one possible. The reader should treat the current rate level as a permanent element of their household budget for the coming months and avoid making financial decisions that assume rapid reductions in loan costs. Caution in personal finance became the most important skill in 2026 that the financial market requires of us.

Sources

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