NBP interest rates at 5.75 percent: is this the end of cost stabilization?

The Monetary Policy Council maintained interest rates at 5.75 percent back in November 2024, which became the foundation for long-term loan cost stabilization in Poland. This stabilization came to an end in July 2026, when the escalation of the conflict in the Middle East forced the Council to abandon its path of rate cuts in favor of protecting the zloty exchange rate. By the end of 2026, the reference rate is expected to remain at 5.75 percent, as the risk of currency depreciation completely rules out monetary policy easing in the coming months.

The decision from November 2024 set a ceiling for borrower expectations. By locking the cost of money at 5.75 percent, the MPC cut the market off from speculation about a quick return to the era of cheap credit. At that time, the priority was to anchor inflation expectations, which required sacrificing GDP growth for the sake of financial system stability. Throughout 2025, this level served as an anchor. Commercial banks adjusted their margin models, and households stopped counting on sudden changes in mortgage interest rate tables.

November 2024: The Architecture of Predictability

Maintaining rates in November 2024 was not a technical error, but a conscious defensive strategy against inflationary pressure, which at the time made any maneuvering impossible. The Council sent a clear signal then: the security of the financial sector outweighs short-term support for consumer demand. Borrowers, accustomed to cyclical changes, gained a level of budgetary predictability that was rare at the time. The lack of changes in rates over subsequent quarters allowed for better expenditure planning, eliminating the stress associated with sudden updates to installments based on WIBOR 3M or 6M indices.

For the banking sector, 5.75 percent became the baseline parameter that allowed for precise credit risk estimation. However, this stability had its price. For households, 5.75 percent meant the entrenchment of high debt servicing costs. Household budgets were permanently burdened, and hopes for relief in installments were deferred. Banks, benefiting from a predictable cost of money, could manage credit portfolios more effectively, which stabilized the entire system but simultaneously closed the door to easy credit for the SME sector or individual investments.

November 2025 brought the long-awaited breakthrough. The MPC decided to cut rates, which was the second autumn quarter-point cut in the history of this cycle. This move seemed to herald a new trend that was supposed to lead to a gradual normalization of capital costs. Borrowers, looking at this move, began to plan their finances for 2026 with clear optimism. However, reality quickly verified these assumptions. Instead of further cuts, hard macroeconomic data and geopolitical shocks arrived, which thwarted the Council's plans.

The credit market in the shadow of global tensions

The spring of 2026 proved to be a turning point, where the financial market began to withdraw from bets on further rate drops. In March 2026, analysts began to point out that the room for monetary policy easing had been exhausted faster than assumed. The discussion about whether borrowers would gain at the expense of savers dominated the public debate. Policymakers found themselves in a trap. On one hand, there was social pressure for cheaper money; on the other, the necessity to protect the zloty from external shocks.

July 2026 was the month in which the US-Iran conflict finally buried hopes for any cuts. The escalation of tensions in the Middle East triggered an immediate reaction in global markets, and the zloty exchange rate came under strong pressure. The central bank had to adopt a defensive stance. Maintaining rates unchanged in July 2026 was not a matter of choice, but a necessity resulting from the need to ensure currency stability. Analyses published in, among others, "Parkiet" at the time left no illusions: in the face of such high geopolitical volatility, any attempt to cut rates could lead to an uncontrolled capital outflow, which would consequently weaken the zloty even further.

The end of stabilization, which borrowers are asking about, means a return to a phase of increased risk. However, this is not a return to times when rates rose month after month. It is a phase in which the previous predictability is being tested by external factors. The Polish economy, being part of the global system, is unable to isolate itself from conflicts in the Middle East. Investors are pricing in risk today, and borrowers must prepare for the fact that the 5.75 percent level will become the new norm for the coming months.

Geopolitics as a brake on monetary policy

The US-Iran conflict in 2026 forced a revision of all scenarios prepared by analysts. As late as April 2026, as indicated by Direct Money reports, the market assumed a downward path for interest rates. Today, these documents are merely proof of how quickly the macroeconomic environment changes. The Monetary Policy Council, observing nervous reactions in the currency market, could not make any decision other than maintaining the status quo.

The zloty, as a barometer of sentiment in the region, shows high sensitivity to reports of armed clashes or trade route blockades. When INNPoland published information about growing pressure on the Polish currency, it became clear that the room for maneuver for the MPC had shrunk drastically. Keeping rates at a high level is a classic tool for protecting the currency against depreciation. For a borrower, this means an extension of the period of high installments. Anyone who planned debt restructuring or investments based on cheap credit had to verify their assumptions.

The stability developed in November 2024 was based on the assumption that the domestic economy would cope with inflation under predictable conditions. The conflict in Iran introduced a variable that cannot be sewn into econometric models. It is precisely this lack of predictability that is the essence of the current "end of stabilization." The market no longer fears inflation to the same extent as before, but it fears an external shock that would force the Council to take radical actions, perhaps even a return to hikes, which a year ago seemed like a science-fiction scenario.

Inflation and GDP: why does the MPC not want to ease?

Economic fundamentals, such as GDP dynamics and inflation indicators, looked moderately stable in mid-2026. Nevertheless, members of the Monetary Policy Council remained adamant. The answer lies in the asymmetry of risk. Cutting rates at a time when the zloty is under pressure and energy commodity prices are going wild on global exchanges would risk a return of high inflation. TotalMoney.pl, in its July analyses, pointed out that the gap between consumer expectations and the central bank's stance is becoming increasingly clear.

For policymakers, the durability of disinflationary processes is paramount. Maintaining rates at 5.75 percent for such a long time was a signal to the market that the central bank would not allow financial discipline to be relaxed. Even if it means slower economic growth in the short term, it is a price the MPC is willing to pay for long-term stability. Borrowers who were counting on a quick cash injection thanks to lower installments must understand that their situation is the result of decisions made under conditions of global uncertainty.

The market has lost faith in quick cuts. Investors have focused on the predictability of capital costs. This phenomenon has meant that 5.75 percent is no longer treated as a "high cost," but has become the new "base cost." Every swing upward from this level is now perceived by the market as an alarm signal, and every swing downward – as an unexpected bonus. This new normal is much safer for the financial system than the seesaw we witnessed in 2022–2023.

Forecasts: what awaits us at the end of 2026?

Approaching the end of 2026, the situation remains a stalemate. On one hand, we have hope for the de-escalation of tensions in the Middle East; on the other – the awareness that the economy needs an impulse. Analysts who were drawing optimistic scenarios until recently are now exercising great restraint. Some of them point directly to the risk of a return to hikes, which would be a shock to the credit market.

Are we doomed to 5.75 percent until the end of the year? Much depends on the data that will flow in during the third and fourth quarters. If the pressure on the zloty weakens, the Council may return to the discussion about cuts. However, if the conflict in the Middle East intensifies, maintaining current rates may prove insufficient. The situation from November 2025, when the decision was made for a second autumn cut, remains in the memory of borrowers as proof that the MPC can act in cycles, but the current year is a completely different card in the history of monetary policy.

Investors watching currency exchange rates and bond yields are pricing in a "higher for longer" scenario today. This means that the market no longer assumes a quick drop in interest rates in 2026. This is a significant change in the perception of the situation. For those paying off loans, it means the necessity of long-term budget management under the assumption that installments will not fall in the near future. The stability that was developed in November 2024 has become a safe haven for the Council, which it does not intend to leave until the geopolitical dust settles.

Savers versus borrowers: a balance sheet of gains and losses

The division of society into borrowers and savers in 2026 is clearer than ever. The former, burdened with mortgage loans, are counting on the fastest possible rate cuts. The latter, holding capital in deposits, are reaping profits from the fact that 5.75 percent has been maintained for such a long time. It is a clash of interests in which the MPC acts as an arbiter.

Analyses published in March 2026 by INFOR.PL clearly showed that every prospect of cuts was a signal for capital to retreat. If the central bank decided on aggressive cuts, savers would lose the fastest, which could lead to a flight from the zloty toward hard currencies or other assets. Maintaining the 5.75 percent rate therefore acted as a safety brake, protecting the capital of Poles against excessive loss of value.

The balance sheet of gains and losses is clear: borrowers gained predictability, but at the price of no relief in monthly installments. Savers gained stable interest, but at the price of inflation risk, which cannot be completely eliminated. The stability, developed in November 2024, turned market emotions into cold calculation. The winner was the one who opted for caution, even if it meant no spectacular changes in the portfolio. In the face of global tensions, the lack of changes became the most effective tool for policymakers to protect the national currency.

What this means for you

For a borrower, the current situation means one thing: do not count on a quick return to low installments. The stability of rates at 5.75 percent is a foundation that protects the economy from shocks, but at the same time blocks the chances for cheaper money. If geopolitics, especially the escalation of conflicts in the Middle East, does not allow for the calming of markets, borrowers must get used to the current level of costs for longer.

On the other hand, for savers, maintaining rates is a signal that deposits will remain relatively attractive, although their real rate of return will always balance on the edge of inflation. The key conclusion? Do not plan your finances based on quick rate cuts. Plan based on the assumption that the current level is durable, and any changes will result from factors over which the Polish Monetary Policy Council has limited influence.

Questions and answers

Have interest rates in Poland fallen since November 2024?

In November 2024, the MPC set rates at 5.75 percent. The subsequent cut in November 2025 was the only significant departure from this level; however, later geopolitical tensions in 2026 halted this trend, forcing a return to defensive monetary policy.

How does the situation in Iran affect my loan installment?

The conflict in the Middle East causes volatility in currency markets, which directly hits the zloty exchange rate. To prevent its rapid weakening, the MPC must keep interest rates at a higher level, which makes it impossible to lower loan installments for holders of variable-rate loans.

Where to look for reliable rate forecasts for the end of 2026?

Forecasts published in financial services, such as TotalMoney.pl or Direct Money, are based on an analysis of data from July 2026. They unanimously indicate that MPC decisions are currently fully dependent on the international situation and the stability of the zloty, and not just on internal inflation indicators.

Does cost stabilization mean their decline?

No. Stabilization in the current context means that the Monetary Policy Council has frozen the cost of money at 5.75 percent to protect the system from shocks. For a borrower, this means predictability, but it does not mean an automatic reduction in installments. The end of stabilization would be either a sharp cut in rates or – what is more likely in the current climate – their hike in response to the tightening of the international situation.

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*(Editorial note: The above text contains an analysis of the macroeconomic situation based on data available up to July 2026. It should be remembered that monetary policy is a dynamic process, and MPC decisions may change in the event of a sharp deterioration in the geopolitical situation or inflation data exceeding the central bank's forecasts.)*

*(Additional analysis: From the borrower's perspective, maintaining the current reference rate means that long-term financial planning should assume no significant drop in loan costs in the fourth quarter of 2026. It is worth monitoring primarily the MPC's communications after meetings, paying special attention to the rhetoric regarding the zloty exchange rate, which in the current environment is more important to the Council than stimulating economic growth through cheap money. For savers, the current level of 5.75 percent is relatively favorable, but it is worth considering portfolio diversification in the face of inflation risk, which cannot be ruled out if the conflict in the Middle East affects energy commodity prices in Poland.)*

*(Technical note: Interest rate values and MPC decisions cited in the article are based on historical facts and market forecasts from the indicated time interval. The text does not constitute investment or credit advice. Every financial decision should be made based on individual financial situations and current market conditions, which may change in a short time due to the unpredictability of political events on the international stage.)*

*(Summary of market mechanisms: The mechanism in which the MPC maintains rates at 5.75 percent is intended to balance inflation expectations with the need to maintain the attractiveness of the Polish currency for foreign capital. In the face of global tensions, the central bank is opting for a conservative approach. From the borrower's perspective, the lack of changes means the continuation of the current level of installments. From the system's perspective, it means avoiding currency destabilization, which is crucial for the broadly understood economic security of the country.)*

*(Final conclusions: The reader must prepare for a "higher for longer" variant. Scenarios of quick interest rate cuts have been priced by the market as unlikely in the short term. The stability developed in 2024 has become a foundation from which a departure would require strong macroeconomic arguments, which in July 2026 are simply missing. From an editorial perspective, we are observing a stage in which monetary policy is a hostage to foreign policy.)*

*(Further forecasts: If tensions in the Middle East do not subside in the coming months of 2026, it should be expected that the MPC will maintain the current level of rates until the zloty exchange rate stabilizes. Every meeting of the Council will therefore be crucial not only for borrowers but for every participant in the financial market. It is worth following CPI indicators and the dynamics of the USD/PLN exchange rate, as these will determine the direction for subsequent interest rate decisions.)*

Sources

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