Poland leaves key interest rate at 3.75% as central bank rules out 2026 cuts

Shift in monetary policy stance

The Monetary Policy Council (RPP) kept Poland's benchmark reference interest rate at 3.75% following its two-day meeting on Wednesday. Speaking at a press conference on Thursday, National Bank of Poland Governor Adam Glapiński stated that interest rate reductions before the end of 2026 are completely unrealistic. This assessment represents a change from July, when Glapiński did not rule out proposing a 25-basis-point rate cut before the end of the year. Glapiński indicated that the central bank remains in a wait-and-see mode and projected that rates will remain stable through mid-2027. He also noted that if economic conditions deviate, the council is more likely to consider a slight rate increase rather than an easing cycle.

“If not for the increase in inflation, I would be moving toward a slight reduction in interest rates before the end of the year, but now that is completely unrealistic.”

Commodity prices and inflation drivers

External factors and energy commodity markets have driven Polish consumer price inflation closer to the upper limit of the central bank's tolerance band. Annual inflation rose from 2.5% in June (the exact target level) to 3.4% in August, approaching the 3.5% upper boundary of the target range. Glapiński stated that energy price increases accounted for half of the inflation index reading in August, accompanied by higher natural gas prices across Europe. The inflationary pressure stems from escalating hostilities in the Persian Gulf, where Gulf countries face logistical expenses moving oil port operations toward the Suez Canal. Moderating food prices and cheaper agricultural commodities partially mitigated these headline price increases.

June 20262.5%

August 20263.4%

NBP upper target band3.5%

Erste year-end peak forecast4%

June 2026

2.5 %

August 2026

3.4 %

NBP upper target band

3.5 %

Erste year-end peak forecast

4 %

Data from the article text

Economic growth and market expectations

Poland's gross domestic product expanded by 3.9% in the second quarter, although household consumption growth recorded a slowdown. Economists Rafał Benecki and Mateusz Sutowicz from ING noted that while short-term inflation outlooks deteriorated, domestic conditions do not warrant immediate monetary tightening. Financial markets currently price in approximately 75 basis points of interest rate increases over a 12-month horizon. Erste economist Piotr Bielski projected consumer price inflation to peak at 4.0% at the end of this year, with baseline expectations of rate stability extending through 2027 unless sustained commodity shocks force inflation higher.

Gold reserves expansion

Alongside interest rate commentary, Glapiński reported that Poland's official gold reserves reached 648 metric tons by the end of August. The central bank added 8 tons of gold during August, expanding from over 640 tons held at the end of July. Current market valuation places the total gold reserves at 344.8 billion PLN, yielding unrealized gains of 156.6 billion PLN compared to average acquisition prices. The NBP continues to implement a management board resolution aimed at increasing total gold holdings to 700 metric tons, placing Poland among the ten largest national holders worldwide. Glapiński stated that these gold reserves strengthen the country's credit ratings and support currency stability.

“We belong to the strict global top when it comes to gold holdings, we are among the ten countries with the largest reserves.”

End of July 2026640

End of August 2026648

NBP official target700

End of July 2026

640 tons

End of August 2026

648 tons

NBP official target

700 tons

Data from the article text