Monetary Policy Council Cuts Interest Rates Amidst Optimistic Inflation Outlook

In a widely anticipated move, the Monetary Policy Council (MPC) today announced a decision to reduce interest rates by 0.25 percentage points, bringing the main reference rate down from 4.75% to 4.50%. This marks the fourth such cut this year, offering a welcome respite for borrowers across the nation.

The MPC justified its decision by citing a significant improvement in the near-term inflation outlook. According to preliminary data from the Central Statistical Office (GUS), consumer inflation in September held steady at 2.9% year-on-year, mirroring the August figures. Furthermore, the Council noted that core inflation, which excludes volatile food and energy prices, remained at levels similar to August, although the annual growth rate for services prices continued to be elevated.

“Taking into account the improvement in the inflation outlook in the near future, in the Council’s opinion, it has become justified to adjust the level of the NBP interest rates,” the MPC stated in a press release following the meeting. This move is expected to translate into lower installments for mortgages and business loans, providing a boost to household finances and business operations.

Looking ahead, the MPC emphasized that its future policy decisions would remain contingent on incoming economic data, particularly concerning inflation trends and overall economic activity. The Council also highlighted several risk factors that could influence future inflation, including fiscal policy developments, a potential recovery in consumer demand, and sustained wage growth. External uncertainties, such as changes in administered energy prices and global inflation trends—including shifts in trade policies among major economies—were also identified as key considerations.

Reaffirming its commitment to stability, the MPC concluded its statement by asserting, “The NBP will continue to take all necessary measures to ensure macroeconomic and financial stability, including, in particular, maintaining inflation at a level consistent with the NBP inflation target in the medium term.” This reinforces the central bank’s dedication to fostering a stable economic environment.