The National Bank of Poland is expected to leave borrowing costs unchanged on Wednesday, keeping its reference rate at 3.75% as inflation remains within the central bank’s tolerance band and core price pressures stay subdued.
Poland Central Bank Seen Holding Rate at 3.75%
That makes the decision less about a near-term battle against inflation than about preserving policy space while the Monetary Policy Council waits for clearer signals from domestic wages, regulated prices and the next macroeconomic projection. Preliminary October inflation landed at the top end of the NBP’s target band, but the composition of price growth has not broadened in a way that would force an immediate response. Core inflation excluding food and energy is likely to have fallen below 3%, a level that supports the bank’s current “wait and see” stance.
Sentiment Indicators
For investors, the message is that Poland is not yet entering a fresh tightening cycle, even if the next move eventually comes in 2027. The central bank’s own debate is likely to turn on how sticky inflation looks once energy-related distortions fade and whether regulated-price increases, especially for gas from the start of 2027, push the path higher. That could matter for the zloty, but currency weakness is not the main risk for prices: estimates in the market note that a 10% decline in the PLN would add only about 0.2 percentage point to inflation, limiting the case for rate hikes purely to defend the currency.
The broader economic backdrop still argues for restraint. Wage growth is expected to stay below 6% in 2027, helped by a looser labour market than during the inflation shock that followed the pandemic and Russia’s invasion of Ukraine. The government’s plan to raise the minimum wage by just 3% in 2027 for a second straight year, after increases of roughly 20% in 2023-24, reduces the chance of second-round inflation effects. That is a key distinction from the Czech Republic, where faster wage gains keep pressure on policymakers.
Market positioning reflects that relatively benign backdrop. Polish equities, measured by the EPOL ETF, have been volatile but remain above their 200-day moving average, while the zloty has traded around 0.25 against the dollar with momentum indicators showing little conviction. U.S. dollar trade signals from Adalytica point to extreme fear, while US Treasury bonds show extreme greed, underscoring a broader market preference for caution and duration as central banks diverge.
The real inflection point for Poland is likely to come with the NBP’s November projection. If it shows inflation still elevated around 2027-28, the council may turn more hawkish, especially if regulated energy prices rise more than expected. For now, though, the central bank looks comfortable holding rates steady through year-end 2026, with any tightening more likely to be delayed, smaller and contingent on whether inflation proves durable rather than transitory.
| Entity | Gains | Losses |
|---|---|---|
| Polish households | ▲Stable borrowing costs | ▼No near-term rate relief |
| NBP / Monetary Policy Council | ▲Policy flexibility | ▼Less room if inflation re-accelerates |
| Zloty bears | ▲Limited rate-driven support | ▼Potentially firmer currency if hawkish shift comes |
| Polish rate-cut hopes | ▲Sidelined by steady policy | ▼Delayed easing cycle |
