Key insights
- The Polish central bank held rates steady at 3.75% due to Middle East tensions and rising commodity prices impacting inflation. Inflation accelerated to 3.0% in March, and is not expected to return to the 2.5% target until late 2027. This highlights the global impact of geopolitical events on monetary policy and inflation, indirectly influencing US equities through broader macroeconomic conditions and investor sentiment.
Investing.com -- Poland’s central bank kept its main interest rate unchanged at 3.75% on Thursday, matching expectations of all 30 analysts surveyed by Reuters, as the Middle East conflict and rising commodity prices raised concerns about inflation.
The Monetary Policy Council’s decision follows a 25 basis point cut last month, which brought the benchmark rate to 3.75%. The bank has lowered borrowing costs by two percentage points since May 2025.
After the March cut, central bank Governor Adam Glapinski identified the Iran war as the biggest risk for inflation in Poland, though he suggested further rate cuts could occur if the situation calmed quickly. However, several rate-setters recently indicated they do not expect additional easing soon as the conflict continued.
"The decision to keep rates on hold was quite obvious, given that a spike in commodity prices raised uncertainty about the inflation outlook," said Piotr Bielski, head of the economic analysis department at Santander Bank Polska.
Inflation in Poland accelerated to 3.0% year-on-year in March from 2.1% in February, driven by fuel price increases triggered by the Middle East conflict.
Bielski said inflation is unlikely to return to the central bank’s 2.5% target before the end of 2027, despite government measures including tax cuts and price caps at petrol stations. He expects the Polish central bank to keep rates unchanged until the end of 2027.
The MPC will release a statement about the meeting, and Governor Glapinski is scheduled to hold a news conference at 1300 GMT to explain the council’s decision.
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