Poland rules out interest rate cuts

Published 7 July 2024 at 09.53

Economics. The Central Bank of Poland will keep the policy rate at 5.75 percent at least until 2026, as CPI inflation is at 2.8 percent, writes Remix News.

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With 37 million inhabitants, Poland's decision is important for how other European countries as well as the European Central Bank ECB will deal with elevated inflation.

During a press conference after a two-day meeting with the country's monetary policy council, Adam Glapiński announced , head of Poland's central bank NBP, that the council decided to maintain the current interest rates of 5.75 percent until 2026.

He emphasized that a possible reduction in interest rates is not an issue until inflation falls below the inflation target, which is expected to happen first in 2026.

– We can forget about interest rate cuts with elevated inflation, Glapiński said.

That assessment differs from Sweden's Riksbank, which, despite inflation of 3.7 percent, lowered the interest rate to 3 .75 percent in May. A decision that has been applauded because it gave momentum to the price rally in the Swedish housing market, but which is also considered risky by assessors.