NBP interest rates at 5.75 percent – why did the MPC freeze loan costs?

In November 2024, the MPC maintained interest rates at 5.75 percent, which stabilized mortgage installments at a high level, preventing further increases but providing no relief to those in debt. This decision was a direct result of the NBP's inflation projection, which indicated persistent price pressure exceeding the central bank's target. The Council concluded that any monetary policy easing at that moment could lead to a lasting destabilization of inflation expectations and a weakening of the zloty exchange rate.

November 2024: Why did the MPC choose the status quo?

November 2024 brought a decision that meant stagnation for millions of Poles paying off mortgages. The Monetary Policy Council kept the main NBP reference rate at 5.75 percent. This move cut off speculation about sudden increases in the cost of money, but for holders of variable-rate loans, it was no success. Installments remained at a high level, and hopes for a quick breather in the household budget were shelved.

The Council did not act in a vacuum. The decision to maintain the status quo resulted from an analysis of the NBP's inflation projection. This document clearly showed that the growth dynamics of prices for services and goods in Poland had not slowed down enough to safely begin cuts. MPC members adopted a defensive strategy. They believed that in the face of an unstable situation in global markets, easing monetary policy would be too risky a move. Maintaining rates at 5.75 percent became the main tool in the fight to return to the NBP's inflation target.

The central bank had to stifle price growth without being able to afford to slow down the economy too abruptly through even higher loan costs. The end result was ruthless for borrowers. Freezing rates at this level stabilized debt service costs, but at a level that was borderline for many households. The lack of increases was a success in the fight against inflation, but for the average bank client, it was merely the continuation of a difficult financial reality. The MPC bought itself time, but the price for this stabilization was paid by everyone who had WIBOR written into their loan agreements.

Impact on wallets: Borrowers in limbo

For holders of liabilities based on the WIBOR index, the November 2024 decision meant no changes in the amount of monthly installments. To understand the scale of this burden, let's look at an example mortgage loan of 300,000 zlotys, taken out for 30 years with a bank margin of 2 percentage points. With a reference rate of 5.75 percent and taking into account WIBOR rates, which oscillated around 5.8-5.9 percent during this period, the total interest rate on the loan was nearly 7.8-7.9 percent.

The monthly installment of such a loan, consisting of principal and interest parts, was around 2700–2800 zlotys. Keeping rates unchanged meant that for the months following November 2024, this amount remained almost unchanged. For a family with one income or a limited budget, this sum represented a significant portion of monthly expenses. Every 0.25 percentage point rate cut could have brought relief of 50-60 zlotys per month for such debt. In November 2024, borrowers were deprived of even this symbolic benefit.

There was no talk of a breather for household finances. The MPC, by choosing the status quo, deferred the relief that many had hoped for after earlier, more dynamic moves in monetary policy. The lack of a cut meant that principal-interest installments remained at a level felt as severe. The identical situation applied to savers. Keeping rates unchanged translated into a lack of reaction from commercial banks regarding deposit interest rates. Capital in savings accounts earned at a similar level, which was a disappointment for clients expecting faster monetary policy easing. Instead of real profit, bank clients received stagnation. The MPC sent a clear signal: cheaper money in Poles' wallets would have to wait, and the current cost of credit is the price the economy pays for fighting price pressure.

Zloty under pressure: External factors in 2024

Maintaining interest rates at 5.75 percent was a direct consequence of uncertainty flowing from global markets. Instead of the expected cut, borrowers received stabilization. The reasons for such restraint by Council members lay far beyond Poland's borders. The economic climate at that time was defined primarily by tensions between the USA and Iran, which could instantly overturn scenarios drawn up by analysts in Warsaw. The MPC could not afford a looser monetary policy when the zloty exchange rate was constantly tested by capital fleeing to safe havens.

The influence of the international environment on the decision to freeze the cost of money was evident. The escalation of the conflict in the Middle East drove up energy commodity prices, which directly hit the foundations of the Polish economy. Pressure on the zloty exchange rate effectively tied the hands of the Monetary Policy Council. Cutting rates too quickly in the face of a weakening currency could have led to its sharp devaluation and fueled imported inflation, which would have been extremely dangerous in the context of the inflation target.

Maintaining high interest rates became a necessary defense mechanism. For the MPC, exchange rate stability remained a priority, even at the cost of maintaining high loan installments. The fate of borrowers then became hostages to global politics. Every signal from Washington or Tehran resonated directly in mortgage interest rate tables, effectively blocking any room for maneuver for easing monetary policy along the Vistula. It was a strategy of survival, not development, which was painfully felt by loan holders.

Evolution of monetary policy: From stabilization to cuts

The long wait for a change of course in monetary policy ended only after many months of lethargy. November 2024 was a period in which the Monetary Policy Council kept interest rates at 5.75 percent, freezing mortgage installments at a high level. For almost a year, the situation resembled a status quo in which inflationary threats blocked any easing.

The breakthrough came only in the autumn of 2025. It was then that the MPC finally opened the door to the long-awaited cycle of cuts. The first downward moves were not a sharp cut, but rather a cautious testing of the market. Already in November 2025, the Council decided on the second autumn "quarter" of cuts, which confirmed the change in attitude at the NBP. It was a signal to banks that the era of restrictive money costs was slowly becoming a thing of the past, although for borrowers themselves it meant only cosmetic changes to repayment schedules.

Analysts warned against excessive optimism from the beginning. Even when the cycle of cuts gained momentum, forecasts from 2026 remained cautious. Forbes experts pointed out as early as November 2025 that we would reach the optimal level at the earliest by the end of 2026. Looking at those predictions, it is clear how difficult it was to balance stimulating the economy with keeping inflation in check.

Here are the key turning points of this process:

November 2024 — Maintaining rates at 5.75 percent (Wiadomości PRO).
Autumn 2025 — Start of the interest rate cut cycle.
November 2025 — Second autumn quarter of rate cuts (Bankier.pl).
End of 2026 — Forecasted achievement of the optimal rate level (Forbes).

For a borrower, these numbers are not just data from MPC communiqués. It is a real, albeit slow, decrease in the cost of debt. However, savers on deposits already knew then that with each decision of the Council, their profits would melt away before their eyes. The financial market in 2026 had already stopped waiting for a miracle, focusing on a permanent adjustment to the new reality.

What do experts think about the pace of cuts?

The Monetary Policy Council in November 2024 made the decision to maintain interest rates at 5.75 percent. This decision effectively cut off speculation about further increases, but for those paying off liabilities, it brought no relief. The wallets of the indebted remained burdened to the same extent as before. Economists unanimously point to the MPC's caution as the foundation of stability, although in the corridors, there is increasingly loud talk about the costs of such a strategy. Market observers point out that the central bank's policy is not suspended in a vacuum.

Forecasts from April 2026 confirm that monetary policy easing was carried out in a gradual, almost pharmaceutical mode. It is a slow process. Analysts emphasize that there was no talk of sudden plot twists, and the schedule of cuts was rigidly linked to hard macroeconomic indicators. The pace at which the MPC eased restrictions depended on two variables: GDP growth dynamics and the latest inflation data. These were the main axis of dispute within the Council.

The optimism of last autumn, when the market was waiting for faster cuts, was slowed down by geopolitical uncertainty. The zloty remained under pressure, which further limited the room for maneuver for policymakers. Experts cooled emotions, noting that although the cycle of cuts is ongoing, the road to reaching the optimal level of rates was long and riddled with risky variables. Borrowers had to arm themselves with patience, because noticeable drops in installments took much longer to arrive than had been assumed just a few quarters earlier. The lack of haste on the part of the NBP was dictated by the desire to avoid a secondary rise in inflation, which in the long term was intended to protect the purchasing power of money, although the price for this was lower private consumption.

Perspective 2026: Where are we today?

August 2026 brings a picture of an economy that is still fighting for balance between cooling inflation and real support for Poles' wallets. The key turning point occurred nearly two years ago. In November 2024, the Monetary Policy Council decided to maintain interest rates at 5.75 percent. This decision became the foundation for the current financial stabilization, but for borrowers, it was a bitter pill. Freezing the cost of money cut off speculation about further drastic installment increases, but at the same time, it excluded the chance for their rapid decline.

Today we see clearly that that move was necessary, though painful. Mortgage installments anchored at a high level, and despite the ongoing cycle of cuts, the pace of change is disappointingly slow. An economist quoted by Forbes already in November 2025 tempered the mood, indicating that we would reach the optimal level at the earliest by the end of 2026. This process is spread over time, which for the average borrower means long-term living with a high household budget burden.

The labor market remains the most important indicator of the country's condition. Despite global tensions, which the July press review mentioned in the context of escalation in Iran or pressure on the zloty, the domestic economy shows resilience. The Monetary Policy Council is not rushing with cuts, fearing the awakening of consumption. Savers lose with every downward move, and borrowers are still waiting for real relief. The current situation is a stalemate stabilization. On one hand, we avoided crisis scenarios, on the other – no one can speak of financial comfort. We are in a waiting phase, which for many families has already lasted far too long.

MPC decision-making mechanisms: Long-term analysis

Understanding why the MPC kept rates at 5.75 percent in November 2024 requires looking at the structure of the Polish economy. The NBP in its reports regularly pointed to the so-called stickiness of core inflation. This means that the prices of services and goods that are not subject to energy or food price fluctuations were growing at a pace that made a quick rate cut impossible. Policymakers at the NBP feared that premature monetary policy easing would be interpreted by the market as a surrender to inflation.

It is worth noting that in 2024, the Polish banking system was under strong influence from WIBOR. This indicator, which is the basis for loan interest rates, reacted not only to current MPC decisions, but primarily to market expectations regarding the Council's future moves. If investors started to believe that the MPC would cut rates, WIBOR fell, and loan installments decreased even before the official decision. In November 2024, however, the market stopped pricing in quick cuts, which blocked the decline of WIBOR and kept installments at a high level.

Such a situation put borrowers in a difficult position. They had to observe not only NBP communiqués, but also data from financial markets, which determined the cost of their loans. In that period, every negative report from abroad about the escalation of armed conflicts caused increases in treasury bond yields, which in turn affected the valuation of WIBOR. It was a kind of trap from which there was no easy way out without a change in the central bank's attitude.

The role of savers in monetary policy

While borrowers complained about high installments, savers in savings accounts and deposits enjoyed relatively high interest rates for a time. Keeping rates at 5.75 percent meant that banks offered deposits at a level of 5-6 percent per year. For people with capital, this was a chance to protect savings from inflation. However, in retrospect, these profits were illusory. The real rate of return, i.e., profit after deducting inflation and capital gains tax (Belka tax), often oscillated around zero.

In November 2024, the MPC faced a dilemma: whom to support? On one hand, millions of borrowers whose budgets were at the limit of capacity, on the other hand, savers who, at lower rates, would lose the motivation to keep money in banks. The choice of the status quo was an attempt to satisfy everyone, which in practice did not bring a solution to the problems of either side. Borrowers still paid high installments, and savers saw the real value of their money stand still.

It was precisely this lack of balance between the needs of two social groups that was most criticized by economists in 2025. It was suggested that the central bank's policy should be more flexible so as not to lead to a drain on savings while simultaneously stifling consumption with loans. However, arguments about exchange rate stability and fighting imported inflation won out over postulates about supporting households.

Did the forecasts from 2025 come true?

Analyzing the state of 2026, one can assess the accuracy of the forecasts made in the autumn of 2025. At that time, many analysts predicted that the pace of cuts would depend on the condition of the labor market. If unemployment remained at a record low level, the NBP would have more freedom, because high employment would allow Poles to service even more expensive loans. However, the economic slowdown, which began to be visible in GDP data at the end of 2025, forced faster action.

The Forbes forecast about the "optimal level" at the end of 2026 seems extremely precise today. The Monetary Policy Council, despite internal disputes, consistently implemented a plan of gradual easing. What seemed impossible in November 2024 – namely a slow return to cheaper money – became a fact, although for many borrowers this process took much too long.

In retrospect, one can say that November 2024 was a moment of "freezing." It was a decision made in the shadow of great geopolitical uncertainty. Today, when we look at that data, it is clear that the NBP acted in accordance with the textbook definition of conservative monetary policy. Could it have been done better? The answer to this question remains a matter of dispute among economists, but for borrowers, the answer is clear: it was a time of waiting that cost them real money.

What this means for you

The MPC's decision of November 2024 was a strategic 'freeze' that allowed the Polish economy to avoid an inflation shock, but at the cost of high loan installments. Savers on long-term deposits gained, while borrowers lost, having to wait for cuts almost a year longer than originally assumed. This stabilization was the price for fighting for price stability, however, for the average family with a mortgage, it was a time of uncertainty and sacrifice.

Questions and answers

Why didn't the MPC cut rates in November 2024?

Due to high geopolitical uncertainty and pressure on the zloty exchange rate, the Council decided to keep rates at 5.75 percent to protect price stability in accordance with the NBP's inflation projection.

When did we realistically feel the drop in loan installments?

The first clear interest rate cuts by the MPC took place only in the autumn of 2025, which translated into a gradual decrease in loan service costs in the following months.

What factors determine the pace of rate cuts in 2026?

Key are consumer inflation indicators, GDP dynamics, and the situation in international energy commodity markets, which directly affect the zloty exchange rate and price pressure.

Sources

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