NBP interest rates: Is 5.75 percent the final stabilization?

In November 2024, the Monetary Policy Council (MPC) kept interest rates at 5.75 percent, which initiated a long-term period of money cost stabilization in Poland. This decision became the foundation of a monetary policy that defined financing conditions for Polish enterprises and households for the subsequent quarters. The market, which as late as the autumn of 2024 lived in hope of a rapid reversal of the tightening cycle, faced a reality where the cost of capital ceased to be a variable and became a permanent element of the economic landscape.

For borrowers, this decision meant the necessity of long-term planning amidst high debt servicing costs. Let us imagine a mortgage loan of 500,000 PLN, taken out for 25 years, with a bank margin of 2 percentage points. With a reference rate of 5.75 percent and a 3M WIBOR rate oscillating in similar regions, the loan interest rate is approximately 7.75 percent. The monthly principal and interest installment in such a scenario is approximately 3,800–3,900 PLN. Every instance of maintaining rates at 5.75 percent means that this amount remains untouched, preventing borrowers from easing their household budgets. If the Council had decided on a cut of 0.25 percentage points, the installment for the same loan would have fallen by about 80–100 PLN. On an annual scale, this means over a thousand zlotys in savings that have been frozen in banking systems due to the MPC's cautious policy.

Geopolitical braking mechanism

The stabilization of money costs does not result from the Council's lack of activity, but from the increasingly strong dependence of Polish monetary decisions on external factors. From the perspective of July 2026, it is clear that the Polish economy has become a hostage to conflicts in the Middle East. Analyses published by XTB on July 8, 2026, clearly indicate that the situation in Iran poses a direct threat to price stability in Poland. Every escalation of tension in this region translates into global commodity markets, and consequently, into energy prices in Europe.

The Monetary Policy Council, while analyzing these indicators, must weigh inflationary risks against the need to support the economic climate. If oil or gas prices rise sharply as a result of military actions, the central bank cannot afford to loosen policy. Similar conclusions emerge from reports by the Polish Economic Institute (PIE) from July 18, 2026. PIE emphasizes that decisions on cuts will depend on the level of escalation of armed conflicts. This dependence makes forecasting MPC moves a task for geopolitics experts, and not just macroeconomic analysts.

For the borrower, this means it is no longer enough to just track CPI inflation data or wage dynamics in Poland. One must observe reports from Tehran or Damascus, because, paradoxically, they decide whether the loan installment in a Polish bank will budge downwards. This situation creates a state of permanent uncertainty. The market has no guarantee that the current cost of money will persist for the coming months. One shock in the global oil market is enough for the MPC to change its rhetoric from "waiting for cuts" to "readiness for hikes."

Loan market in a trap of rigidity

Borrowers live under the conviction that every meeting of the Council should bring relief. Meanwhile, data from the end of 2025 show that even if the MPC makes minor adjustments, commercial banks do not always pass them on to the client at the expected pace. As reported by the TVN24 service in December 2025, installments for some loans remained unmoved despite signals coming from the NBP. Market mechanisms can be resistant, and bank margins as well as long-term contract valuations effectively absorb interest rate movements.

Banks build their offers based on long-term expectations. If the market predicts that rates will remain high for the coming years, a bank will not lower loan interest rates just because inflation fell slightly for one month. This phenomenon creates a gap between the official NBP communication and the borrower's account balance. Clients who counted on a quick breath of relief in their household budgets collided with a wall of corporate procedures and the cautious approach of financial institutions.

Many borrowers began looking for alternatives, such as refinancing or moving the loan to another bank, but in a high-rate environment, these operations are often unprofitable. Ancillary loan costs, such as property valuations or early repayment fees, negate the gains from minimal differences in interest rates. As a result, millions of Poles remained tied to conditions established in times when inflation was the main enemy of the economy, rather than its chronic shadow.

Forecasts versus the reality of 2026

The pursuit of the so-called optimal interest rate level became the main topic of economic debates in 2026. Forbes, in its report from November 6, 2025, cited economists who predicted that we would reach the optimal level no sooner than the end of 2026. From today's perspective, it is clear how difficult that task was. Forecasts published in April 2026 by Direct Money indicated an extremely high degree of uncertainty. Every analyst who tried to point to a specific date for the start of the cutting cycle had to face the unpredictability of the global political scene.

The financial market has developed a specific resistance to disappointment. When on November 4, 2025, the media, including Biznes Alert, heated up the atmosphere before a key MPC meeting, investors were already prepared for a lack of radical changes. This "tamed stagnation" became the new norm. Instead of discussions about the dynamics of declines, risk analysis dominates. Investors in the bond market are pricing in the risk of rates remaining at a high level for much longer than was assumed even two years ago.

One cannot ignore the impact that this waiting has on the real economy. Companies are holding back on investments, not knowing if the cost of capital will fall in the next six months. Borrowers are limiting consumption to protect themselves against potential increases in installments in the event of so-called geopolitical black swans. This phenomenon creates a self-reinforcing mechanism of caution that stifles GDP growth dynamics. Everyone is waiting for the NBP's move, and the NBP is waiting for signals from world markets.

What does the lack of changes mean for the wallet?

Maintaining rates at 5.75 percent has two faces. On one hand, we have savers who reap profits from the high cost of money on deposits and treasury bonds. On the other hand, there are debtors for whom every subsequent decision to maintain rates is a painful lesson in financial management. It is worth noting that this group is much larger and more sensitive to changes in the economic climate.

For a person with a loan of the aforementioned 500,000 PLN, every MPC decision to "leave rates unchanged" is in practice a decision to have no real growth in household disposable income. If wages do not grow at a pace that keeps up with debt servicing costs, every subsequent installment becomes an increasingly greater burden. This leads to a change in the structure of expenses – less money is spent on services, culture, or vacations, and more on meeting the bank's requirements.

Banks, in turn, seeing the unstable geopolitical situation, have maintained rigorous criteria for granting loans. This means that not only current borrowers suffer due to high rates, but also people aspiring to buy their own apartment cannot enter the market. The barrier to entry, determined by creditworthiness calculated at high rates, effectively excludes broad social groups. We are therefore dealing with a situation in which monetary policy is not only fighting inflation but also changing the social structure, perpetuating divisions between those who possess capital and those who must finance themselves at high costs.

Does the cutting cycle even exist?

The question of an interest rate cutting cycle in Polish conditions is becoming increasingly theoretical. Instead of a predictable decline, we observe reactivity to global shocks. If we look at data from July 2026, when the wgospodarce.pl portal analyzed the credit situation, it is clear that the market has stopped believing in a "cycle" as an orderly process. Currently, there is more talk of "decision windows."

If the situation in the Middle East calms down, space will appear for a small move downwards. However, if the conflict in Iran leads to a blockade of trade routes, rates may remain frozen for subsequent quarters or even rise. This is no longer classic monetary policy, based on inflation targets and the output gap. This is crisis management under conditions of high exposure to global risks.

For stock market investors, this situation is also not easy. Companies listed on the WSE that are heavily indebted are losing value because the high cost of debt servicing eats into their net profits. Conversely, dividend-paying companies that have large amounts of cash benefit from higher rates. The market is therefore divided. There is no uniform trend that would allow for an optimistic look into the future. Everything depends on whether the MPC decides that the Polish economy is resilient enough to withstand lower rates in the face of global chaos.

Conclusions from the borrower's perspective

In summary, the situation in which millions of Poles have found themselves is a direct result of decisions made in November 2024. Stabilization at the 5.75 percent level was a choice of the lesser evil. From the central bank's perspective, it was a transition to a defensive mode intended to protect the zloty and limit inflation expectations. From the citizen's perspective, it was a period of long-term belt-tightening that did not bring the expected relief.

It is worth acknowledging that a return to the "cheap money" of 2020–2021 is impossible in the near future. Even if interest rates fall to the level of 4 percent or 3.5 percent, it will be a process spread over years. The economy must go through an adjustment phase in which financing costs will be higher than those we got used to in the previous decade.

Indebted individuals must prepare for pessimistic variants. Financial planning in 2026 requires taking into account the risk that rates will remain high longer than the banks' optimistic forecasts suggest. If you are planning to take out a loan, do not base your calculations on the assumption that installments will fall immediately. You must be able to service your obligation at the current level of rates for at least the next 12–24 months. This is the only safe strategy in a world where interest rates have become a function of events taking place thousands of kilometers from Warsaw.

Questions and answers

Why has the MPC kept rates at 5.75 percent for so long?

This decision results from the need to fight persistent inflation and protect the value of the Polish currency in the face of global geopolitical instability, especially in the Middle East, which limits the space for loosening monetary policy.

What will happen to my installment if the conflict in the Middle East escalates?

An escalation of the conflict, especially in Iran, could lead to an increase in energy commodity prices. In such a scenario, the probability of maintaining high rates, or even raising them, increases, which means that loan installments may remain at a high level or even rise.

Do forecasts from 2026 give hope for cheaper loans?

Forecasts indicate that the path to cuts is dependent on external factors. Experts suggest that we may approach the optimal level of rates no sooner than the end of 2026, provided that the situation in international markets stabilizes.

Do banks always lower installments when the MPC cuts rates?

No. Market mechanisms, such as bank margins and long-term contract valuations, often absorb MPC moves. Even if the reference rate falls, banks may not fully pass these changes on to the client in the short term, which causes installments to fall more slowly than borrowers expect.

Is 5.75 percent the final stabilization?

The term "final" is risky in economics. The 5.75 percent level is the current equilibrium point, however, it is extremely sensitive to any external shocks. One can speak of a defensive stabilization that lasts as long as the geopolitical environment does not force the Council to change course.

Sources

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