NBP interest rates in November 2024: Is this the end of hikes?

In November 2024, the Monetary Policy Council (MPC) kept NBP interest rates unchanged at 5.75 percent, which means no changes to mortgage installment amounts. For millions of borrowers, this decision served as a signal confirming the status quo that has accompanied the Polish financial market for most of the second half of the year. The choice made by Council members was dictated by a cool assessment of inflation risk, which, under the macroeconomic conditions at the time, remained the primary challenge for the stability of the zloty and the prices of consumer goods and services.

MPC decision: Maintaining rates at 5.75 percent

The decision of November 6, 2024, was not a surprise to analysts tracking the central bank's actions. The Monetary Policy Council, analyzing incoming CPI inflation data and wage dynamics, concluded that any monetary policy easing would be premature. The main reference rate at 5.75 percent became the benchmark around which commercial banks shaped their loan offers. For the average holder of a variable-rate mortgage, the lack of movement up or down meant freezing the installment amount at the level established in previous months.

It is worth recalling the real market indicators that determine the cost of debt in Poles' portfolios. In November 2024, the WIBOR 3M rate, which serves as the base for most loan agreements, hovered in the range of 5.85–5.90 percent. The stabilization of NBP rates translated directly into a lack of sharp movements in this area, which gave households predictability in planning expenses. However, this did not mean a decrease in the cost of living. High loan interest rates, a direct result of the central bank's restrictive policy, continued to be a significant burden on family budgets, limiting consumption and the ability to take on new financial obligations.

In their statements, Council members emphasized that the priority is to permanently bring inflation down to the NBP target. Maintaining the cost of money at 5.75 percent was intended to act as a safety valve, suppressing demand pressure in the economy. From the central bank's perspective, any cut at that moment carried the risk of reigniting inflation expectations, especially in the face of a strong labor market and wage pressure. Policymakers therefore preferred to adopt a defensive stance, waiting for more unambiguous signals of price growth processes fading, even if it came at the cost of slowing investment dynamics in the private sector.

Why did the MPC decide against a move?

The reasons for the November decision went much deeper than just current inflation readings. The Council had to take into account a number of external factors that influenced asset valuation in Poland in 2024. One significant element was the geopolitical situation, including tensions between the USA and Iran, which affected energy commodity prices. Every jump in oil or gas prices on global markets was interpreted by the NBP as a direct threat to domestic price stability. In conditions of international uncertainty, the Council chose caution, concluding that it was better to maintain restrictive financial conditions than to allow the destabilization of the zloty through an overly early rate cut.

Analysis of GDP data from late 2024 provided mixed signals. On one hand, the economy showed signs of resilience, which gave the MPC room to maintain high rates without the risk of triggering a deep recession. On the other hand, the slowing of investment dynamics, resulting from the exhaustion of fiscal impulses, raised concerns about the country's long-term growth potential. Council members concluded that current restrictions were not stifling the economy in an unacceptable way and could therefore remain in force for subsequent quarters.

Communication with the market was also significant. In November 2024, messages coming from the central bank were extremely cautious. Declarations regarding the start date of the easing cycle were avoided, which was intended to cool the expectations of investors and borrowers. The Council wanted to avoid a situation where the financial market would price in rate cuts faster than the macroeconomic situation would allow. This approach, while frustrating for those in debt, was consistent with the anti-inflationary doctrine that the NBP adopted after the period of greatest price turbulence in 2022–2023.

Impact of the decision on Poles' wallets

For the average borrower, the lack of an interest rate change in November 2024 was information that there would be no change in the monthly installment amount. In practice, this meant that the costs of servicing debt remained at a high, but at least predictable, level. However, it is worth looking at this phenomenon in a broader context. For households whose incomes were not growing as fast as the cost of living, every loan installment remaining at a high level represented a real challenge.

Savers found themselves in a different situation. Maintaining rates at 5.75 percent meant that commercial banks were not forced to raise interest rates on deposits and savings accounts. Many bank clients had to come to terms with the fact that earnings from deposits still did not cover the real loss of money value over time, which prompted some people to look for alternative forms of capital investment, often burdened with higher investment risk.

Banks, meanwhile, enjoyed a relatively high net interest margin under stable rate conditions. For the banking sector, the November decision was favorable, as it allowed for the continuation of lending policy without the need for deep corrections in the valuation of banking products. This situation created a kind of balance – borrowers avoided installment increases, savers did not gain new opportunities to grow their wealth, and banks maintained stable operating income. It was an arrangement that in 2024 satisfied only financial institutions, while the private sector had to adjust its financial plans to the realities of the high cost of money.

Prospects for subsequent quarters: What awaits us?

In November 2024, forecasts regarding the future of interest rates were the subject of lively debate. Most economists indicated that a cycle of cuts was inevitable, but its pace remained a big unknown. Discussions focused on the date when the MPC would dare to make the first move downward. At that time, estimates pushed this moment to the second half of 2025, which meant that borrowers had to prepare for long months of high burdens.

Geopolitics remained a factor that could not be fully predicted. Every regional conflict affecting energy prices automatically changed the time horizon for potential cuts. In its forecasts, the Monetary Policy Council had to take into account so-called alternative scenarios in which inflation could accelerate again. This meant that any forecasts regarding the level of rates at the end of 2025 were burdened with a high degree of error risk.

Experts emphasized that the road to an optimal level that would allow the economy to breathe was still very long. Many indications suggested that even in 2026, interest rates could remain at levels significantly higher than in the pre-pandemic period. For the loan market, this meant the necessity of adapting to a new reality in which cheap money had become history. The stability announced in November 2024 was therefore only a stop in the long adjustment process that the Polish economy was undergoing.

Economic environment of the decision: GDP and the labor market

The decision to maintain rates at 5.75 percent was closely linked to the condition of the Polish labor market. In November 2024, the unemployment rate remained at historically low levels, which on one hand testified to the strength of the economy, and on the other – generated strong wage pressure. Employers, wanting to attract and retain employees, had to offer increasingly higher wages, which directly translated into rising production and service costs. In economic theory, this phenomenon is called a wage-price spiral. Observing these processes, the Monetary Policy Council had every right to fear that a rapid reduction in interest rates would only accelerate this mechanism.

GDP dynamics in 2024 were subject to numerous revisions. Initial optimistic forecasts about a dynamic rebound after the inflationary period were verified by real data on corporate investments. Companies, facing high capital costs, limited their development plans, which hampered the country's growth potential. The MPC found itself in a bind: on one hand, it had to fight inflation, and on the other – it could not lead to economic stagnation. The choice to stabilize interest rates was, in this context, an attempt to find a "golden mean" between these two goals.

Key economic parameters in November 2024:

NBP reference rate: 5.75 percent.
Average WIBOR 3M: approx. 5.85–5.90 percent.
Wage pressure: high, determining core inflation.
Energy prices: main risk factor for CPI forecasts in 2025.

Analysts pointed out that the meeting was a textbook example of a "wait and see" policy. Instead of taking drastic moves, the MPC preferred to wait out the period of greatest volatility, which in practice meant extending comfort for borrowers, but at the same time excluded fast and cheap financing for companies. The lack of reaction was a form of fighting inflation that could no longer be suppressed solely by the restrictive cost of money.

Summary: What to expect from the MPC?

November 2024 brought a decision that became a benchmark for millions of borrowers for the coming months. The Monetary Policy Council maintained NBP interest rates at 5.75 percent. Such a decision meant no changes in the amount of mortgage installments, freezing debt service costs at the current level. With that meeting, policymakers from the National Bank of Poland clearly communicated that their priority remained returning inflation to the target. The Council did not hide its skepticism toward premature monetary policy easing, choosing a wait-and-see stance instead of opening the door to cheaper money.

From the point of view of economic strategy, the November move was not accidental. The MPC adopted a long-term stabilization strategy, which assumed that fighting price pressure required maintaining rates at a higher level for a longer time. Every decision to freeze loan costs brought temporary stabilization for Poles' wallets, but at the same time cooled hopes for quick cuts.

Today we see clearly how that November period set the path for the entire monetary policy. The market, which at the time was speculating about quick cuts, had to revise its assumptions. The MPC did not succumb to external pressure or social moods. It remained faithful to hard inflation data, which for the average mortgage holder meant one thing: peace in the repayment calendar, but no hope for quick relief in monthly bills. It was a decision about waiting, not acting, which in retrospect proved to be the foundation for the later, more predictable cycle of changes in the country's monetary policy.

What this means for you

For borrowers, the MPC decision means a certain predictability – installments will not rise, but they will not fall either. Those with savings in deposits gain, as they do not lose on interest as quickly as in a scenario of sharp cuts; however, the catch remains the still-elevated inflation, which lowers the real purchasing power of wages. Entrepreneurs, on the other hand, must reckon with the fact that the cost of capital will remain at a high level, which limits their investment opportunities. In practice, November 2024 froze the financial situation of most Poles, forcing them to continue tightening their belts while waiting for better macroeconomic conditions.

Questions and answers

Will my mortgage installments rise after the November 2024 decision?

No, maintaining rates at 5.75 percent means that the cost of money for banks remains unchanged, so installments for loans based on WIBOR did not change. The situation remained stable for all those with variable interest rates based on 3M or 6M indicators.

When can interest rate cuts be expected?

Economists' forecasts from the 2024-2025 period suggested that the path to cuts would be bumpy, and significant downward moves might only occur in later phases of the business cycle, with full stabilization of the cost of money requiring time and the permanent extinguishing of inflation.

Why does inflation still determine MPC decisions?

Inflation remains the main challenge for the NBP; the Council must be sure that price growth is permanently under control before it decides to cut loan costs, in order to avoid the risk of a renewed, sharp increase in the prices of goods and services in the economy.

What impact did geopolitical factors have on the decision?

Uncertainty in energy commodity markets, resulting from, among other things, international conflicts, forced the Council to exercise extreme caution. Every sudden jump in oil or gas prices was treated as a potential threat to price stability in Poland, which effectively blocked the possibility of easing monetary policy.

Did savers gain from the decision to maintain rates?

Maintaining rates at 5.75 percent allowed deposit interest rates to be kept at a relatively high level, but the real profit from savings was still reduced by inflation. The lack of rate hikes meant no increase in profits from deposited funds, which for many people was a signal to look for other ways to secure capital.

Sources

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