Monetary Policy Council Holds Interest Rates Steady, Boosting the Złoty

The Monetary Policy Council (MPC) decided not to adjust interest rates during its first post-summer meeting, providing continued support for the Polish złoty. Current forecasts suggest no rate cuts are expected shortly, with the earliest possibility for changes appearing in the second half of 2025. This could help maintain the złoty’s strength over a longer period.

Experts note that the MPC’s stable approach to interest rates has made the złoty an attractive currency for global investors. “The Monetary Policy Council has kept interest rates unchanged for nearly a year, making the złoty one of the most sought-after currencies worldwide,” said Michał Stajniak, Deputy Director of XTB’s Analysis Department. This is evident in the dollar to złoty exchange rate, which recently tested 3.80, and the euro, which has fallen below 4.30.

According to the MPC’s statement, the current rate levels support medium-term inflation goals. Although inflation has risen due to regulated price adjustments, Poland’s economy remains strong, with wage growth contributing to the stabilization of core inflation, which hit 3.8% year-on-year in July.

Market expectations do not foresee any rate cuts over the next three months. However, in the longer term, the market anticipates around 90 basis points of cuts within the next year, translating to approximately three rate reductions. Some MPC members suggest that such decisions could only come in the second half 2025.

Looking ahead, long-term projections indicate that interest rates may drop to 3.75%, two percentage points lower than current levels. Despite this outlook, the złoty has remained resilient due to the MPC’s consistent policies. Nonetheless, investors remember the controversial rate reductions last year, which saw a 75-basis point cut followed by another 25 points ahead of the October parliamentary elections.

There remains a possibility for earlier rate cuts if inflation shows significant improvement, with some suggesting May, ahead of the presidential elections, as a potential timeframe.

Globally, the monetary policy landscape is shifting. The latest U.S. labor market data, particularly the JOLTS report, shows a decline in job openings, raising the chances of a 50-basis point rate cut by the Federal Reserve to 44%, up from 33%. This, along with potential cuts by the European Central Bank, could theoretically weaken the euro and dollar against the złoty.

However, experts warn of a potential seasonal weakening of the złoty in September, following a typical pattern of currency softening after the summer. Stajniak predicts that the dollar could rise to 4 złoty, which would still be an attractive rate for the USD/PLN exchange.

Implications for Banking and Business

Developments in the Polish banking sector affect businesses operating in the country in several ways. Access to corporate banking services, credit availability, deposit rates, and payment infrastructure are all critical factors for companies — whether established Polish firms or foreign-owned entities entering the market.

For foreign entrepreneurs setting up operations in Poland, choosing the right banking partner is a strategic decision. Major Polish banks including mBank, ING Bank Śląski, Bank Millennium, PKO BP, and Santander Poland offer varying levels of service for international clients, including English-language online banking, multicurrency accounts, and dedicated relationship managers for corporate clients.

The Polish banking market is well-regulated by the KNF (Financial Supervision Authority) and participates in the EU deposit guarantee scheme (BFG — Bank Guarantee Fund), providing deposit protection up to EUR 100,000 per depositor per institution. This regulatory framework provides stability and confidence for businesses maintaining corporate funds in Polish banks.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our personal income tax advisory, or contact us for a free consultation.